A total of �24bn a year is spent on schools

Head teachers have rejected calls for local education authorities to have more hands-on involvement in their finances.

The response comes as the Audit Commission claims representatives from local and national government do not have "reliable information about the state of school finances".

The commission's report, conducted to examine the schools funding crisis last year, said the lack of accountability over the schools' budget - �24bn a year - was "startling".

The survey of schools in 15 councils in England found that there was no widespread crisis and that many schools were holding hefty reserves, with surpluses totalling �1.2bn across the country.

The Audit Commission recommends LEAs take a much closer interest in school finances and develop a special structure to accurately monitor schools' expenditure.

Mr Hart says head need greater autonomy

But the National Association of Head Teachers (NAHT) said schools needed greater autonomy, not greater control.

"The idea that we should be giving local authorities more power over schools when it comes to budget management will appal many heads and runs strictly counter to the move to give schools more autonomy and independence," said NAHT general secretary David Hart.

"Local authorities have plenty of powers already to deal with schools which mismanage their affairs or get into deficit.

"They don't need more powers. What they need to do is use the ones they've got - where the circumstances justify it."

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Mr Hart also said his organisation did not encourage schools to keep large balances, unless it was earmarked for a specific project.

The National Association of Schoolmasters Union of Women Teachers said the Audit Commission's report backed up its view that there had been no widespread funding crisis.

Vindication

The Local Government Association (LGA) said the findings had vindicated its position.

"There is already an accountable structure in place to support, monitor and plan school funding - 150 democratically accountable local education authorities," said LGA chairman Sir Sandy Bruce-Lockhart.

"If the government continues down the road of weakening the role of councils, it would need to create a new centralised bureaucracy at a huge new cost.

"The report shows that far from local education authorities holding back government funding for schools, councils have not only passed it all on but have added to it.

"The report is strong evidence that centralising school funding to Whitehall is neither going to give local support to schools, nor make good use of the public's �24bn."

'Welcome' arrangements

The school standards minister, David Miliband, defended criticisms in the report that a three-year funding plan was rigid.

Mr Miliband makes no apologies

"We make no apology for delivering greater stability in school budgets and greater certainty for heads and school governors in their financial planning," said Mr Miliband.

"These arrangements were developed in consultation with heads, chief education officers and local authority representatives and have been widely welcomed by schools across the country.

"Our widely welcomed proposals for guaranteed three-year budgets for every school in 2006 will build on the best features of the current system and learn from our continuing discussions with LEAs, school employers, and the conclusions of today's Audit Commission report."