THE massive £500,000 fraud at a school which saw its head teacher living  a lavish lifestyle could happen again, chiefs have admitted.

Sandwell Council’s Audit and Risk Assurance Committee has been told there is no guarantee there won’t be a repeat of the swindle which saw hundreds of thousands of pounds being stolen using false invoices. 

The bleak warning came as council officers reported on plans to claw back  money embezzled from the Smethwick school over five years.

The fraud, at Annie Lennard Primary, was masterminded by head teacher Michelle Hollingsworth, who had responsibility for administrating and protecting the school’s budget, helped by school secretary,  Deborah Jones, who falsified invoices. 

Peter Farrow, audit services and risk management manager, told the committee: “The complexity around this case was the two most senior people at the school, the head teacher and the secretary conspiring and also conspiring with some suppliers.  

“So some of the normal checks and controls you would see, like separation of duties, didn’t really work here.”

Mr Farrow added additional checks on invoices were now being carried out  and schools were being given extra training on counter fraud, but he warned : “Can we guarantee this won’t happen again in the future?   

“Difficult to give that guarantee because the separation of duties, the ultimate control, in this case unfortunately had very little effect.”

Between them, Hollingsworth and Jones spent thousands of pounds on furniture, paintings and expensive clothes.

In addition they issued invoices for hundreds of thousands of pounds for work which was overpriced or never carried out to construction companies with links to their families.  

In November, the pair were jailed for a total of nine years and nine months for their roles in the scam, while Hollingsworth’s builder husband, Joseph, was sentenced to 12 months.

In a  statement  to the Local Democracy Reporting Service, Sandwell Council said it conducted audits on schools on a cyclical basis and controls meant no single individual has full control when making payments. 

“At Annie Lennard Primary, this control was overridden by the two people with the most senior, trusted and responsible financial posts, conspiring with each other in order to process fraudulent payments.

“This was further compounded by third parties, in this case a number of suppliers, also actively participating in the collusion.

“It was in this context that council officers highlighted that no organisation could guarantee that, particularly where collusion took place, a fraud could not be committed.”

It added: “The council remains vigilant to detecting and preventing fraud. We are also rolling out enhanced training for schools to raise awareness of the issues arising from the Annie Lennard Primary case, and to help them promptly identify any such instances in the future.

“This was a unique case and the seriousness of the head teacher and secretary’s actions was reflected in the sentences handed out in court.”