A DAMNING report has laid bare a series of failures in financial management of a school following an investigation.

Penny Bridge CE Academy, near Ulverston, has been rapped after it was deemed to have breached academy rules on managing money.

The awarding of a building contract to a relative of the academy trust's chair and misuse of funding meant for physical education have been named as examples of failings in a report that called for 'urgent action' at the primary school.

School leaders say they have been working to resolve issues and have appointed a new governing body since the investigation was carried out in 2019.

The Education and Skills Funding Agency has issued a financial notice to improve as a consequence of findings arising from the Financial Management and Governance Report.

The newly-released report found more than 10 breaches of the Academies Financial Handbook in total.

It found that the school's self-employed caretaker, who had links to the trust's chair, was awarded a contract despite warnings from a consultant over his capability.

The report found building work was completed 62 weeks late and costs continued to be incurred after the completion paperwork was submitted.

Investigations also found funding meant for PE had been used to fund the curriculum and other expenditure, nearly £2,000 worth of iPad tablets.

A total of £150 was also said to have been paid out to trustees in gifts despite the trust having no policy for accounting for gifts.

The probe also found that school funds were being used to support the school's privately-run nursery.

The academy trust reported an in-year deficit of £7,657 in its 2017/18 accounts, with revenue reserves of £4,084.

Penny Bridge chair of governors Debbie Francis said: "We are naturally disappointed by the contents of the report outlining the results of an investigation undertaken in August 2019.

"Since that time we have been working closely with the ESFA support team to ensure we have rectified any priority issues that were raised within the report and developed an action plan to improve the situation in the future.

"The new governing body, who have been in place since June 2020, now have a clear action plan to ensure the school is compliant moving forward.

"We have been overwhelmed with the support we have received from parents and the wider community.

"Through this time the children have thrived academically and personally and will continue to do so in the future."

Under the notice to improve the school has been told it must seek approval for financial transactions including compensation payments, staff severance payments and writing off debts.

Failure to comply will result in the academy' funding being terminated by the Government, the notice says.

The school, which has 118 pupils, was rated 'outstanding' at its last inspection in 2011, two years before it became an academy.