Senior Treasury officials have emphasised the need for devolved service providers to adopt appropriate accounting standards.

Permanent secretary Nicholas Macpherson told the Public Accounts Committee last week that there must be consequences for academies, free schools and other new organisations if they do not account appropriately for how public money is spent.

The committee was taking evidence on the recently-published Whole of Government Accounts (WGA), which bring together the accounts of all public sector organisations for 2009-10.

PAC chair Margaret Hodge noted that many academies created under the previous government have been unable to provide accurate data and audited accounts, and that this problem is likely to be exacerbated as government expands the programme.

Andrew Hudson, the Treasury’s accounting officer for the WGA, agreed that “this is an area of concern, in that it is a growing area that we need to make sure we get right.”

Hodge asked what would happen to accounting officers if they fail to meet required standards. “There will be consequences,” said Macpherson. “I can see that there are many good things that academies could do for education, but equally, you cannot hand out money to bodies and then not have it accounted for.”

MP Joe Johnson said he was concerned that the issues with academy accounts will be “writ large” as GP commissioning consortia are created. Macpherson acknowledged this is “certainly a risk, and if that table [of organisations unable to provide appropriate data] gets longer each year, that would be an indication that something was wrong in the system.”

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