Initial investigations

When there are concerns about the finances of a business, usual practice is to bring in forensic accountants to find out if there has been anything untoward going on. Depending on their findings, the matter might then be passed to the police or a regulatory body for further investigation.

One such case in the news currently focuses on the Hadlow Group, which owns West Kent College and Hadlow College as well as other educational establishments in Kent.

The Education and Skills Funding Agency (ESFA) started an investigation into the group last year after an audit of West Kent College found that significant sums of funding had been claimed when no activity had taken place. At the time, the Deputy Principal said that the claims for this additional funding had been agreed as part of transitional arrangements during the transfer of Kent College contracts.

The ESFA asked the Deputy for evidence proving that it had given him permission to claim this additional funding, and he allegedly adduced an email from the ESFA, which he claimed to have received in 2014. However, when the ESFA checked its own email servers for this email, it was found that it had been altered.

The College’s Deputy Principal is also Finance Director of the Hadlow Group and the investigation appears to have led to his resignation in February, at the same time the Hadlow Group Principal and the Deputy Principal were suspended. Since then, the Chair of Governors of the group and two other Governors have handed in their resignations.

The group has confirmed that it has accepted the resignations and suspension and that it is working with the ESFA on a solution to the “long-term financial health of the group”. However, it will not comment on any allegations until investigations are concluded.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Forensic and fraudulent investigations are vital in helping to uncover potentially game-changing evidence in complex cases such as this one.”

Author: Roger Isaacs 18 March 2019