Police investigate riding lessons and sex games at academies' expense

Department for Education finds 'serious failings' after audit of trust running four schools

A report claims the chief executive of the Priory Trust, Richard Gilliland which runs the Priory Academy LSST in Lincoln (pictured), paid for horse-riding lessons for his son out of school funds (PA)

Police have been called in to investigate the financial affairs of a federation running four of the Government's academies.

The decision came after an audit investigation team from the Department for Education (DfE)revealed "serious failings" in the running of the Priory Federation of Academies Trust.

The department's report, published yesterday, revealed a catalogue of examples of financial mismanagement including:

* The trust's chief executive was paying for horse-riding lessons for his son out of trust funds;

* He had "personal items of an inappropriate nature (eg sex games and supplements)" paid for on his federation credit card and delivered to the federation offices;

* He furnished a flat, at the federation's expense, at the 90-acre Laughton Manor site in Lincolnshire which he subsequently decided against living in for tax purposes.

The chief executive, Richard Gilliland, resigned on 30 March, the day that the department reported its concerns to the Trust.

The DfE report also revealed how Mr Gilliland's daughter, Anna, was paid £868 for a trip to Bali to set up an itinerary for a diving holiday for boarders at the school. The holiday never materialised as the school's boarding section did not open as planned in 2011.

In addition, the report reveals how Mr Gilliland and the trust's former finance director Steve Davies used their federation credit cards whilst in France at a centre bought by the Trust for residential trips "to purchase items at supermarkets and meals at restaurants".

Examples cited in the report include a Christmas Day purchase at a restaurant of lunch for £314.84p.

The report also reveals that Mr Davies was not a qualified accountant, adding: "Mr Davies is a sailor and is currently sailing his boat in the Caribbean."

The Priory Federation runs four government-financed academies in Lincolnshire: the Priory Academy LSST, the Priory Witham Academy, the Priory City of Lincoln Academy and the Priory Ruskin Academy. The Priory Trust regularly appears on the list of the top-performing state schools .

A DfE spokesman said yesterday: "The Department's investigation into the Priory Federation revealed serious failings of key individuals in relation to financial management. The Trust has accepted responsibility and the CEO has now left. The Department has also referred this matter to the police."

The Trust, in a statement, said: "The report and its findings relate only to the operation of the Trust and not to any of its individual academies." It added the investigation had accepted its purchase of the centre in France and Laughton Manor had been justified as "innovative educational practice". It said the Education Funding Agency, which carried out the investigation, had graded its auditing systems as "outstanding" only a year ago.