Police should be called in to investigate the demise of an academy chain, says the leader of Wakefield Council.
During a meeting of full council today, it was claimed that Wakefield City Academies Trust (WCAT) transferred millions of pounds of schools' savings into its own centralised account prior to its collapse.
And three of the district's member schools could now lose a total of more than £1.5m.
Council leader Coun Peter Box was among several councillors to say the investigation should be referred to the police.
Coun Box said: "It has been suggested that we refer this matter to the police. Can I totally endorse that suggestion? We have heard statements from colleagues that make it quite clear that there are serious questions to be answered about the way that money has been dealt with and it would appear has not been given back."
A motion, put forward by Coun Kevin Swift and debated by councillors,said that Hemsworth Arts and Community Academy faces losing £436,000 of its reserves, Wakefield City Academy could lose nearly £800,000 and Heath View Primary £300,000.
Former Hemsworth Academy governor Coun Sandra Pickin said more than £220,000 of the schools' fund, which had been raised before it became an academy in 2012, had "managed to dwindle its way out".
A further £216,000 of its capital fund for future building, had also disappeared, she said.
Coun Pickin told the meeting: "It is downright disgraceful that they have taken it without a word, and they need to put it back."
Coun Ros Lund, a governor at Heath View Academy, said £300,000 earmarked for improvements at the school had been 'borrowed' and would be paid back.
She said: "We have never received a penny back. It's a deprived school in a deprived area - that money was badly needed."
"Clearly we aren't going to see it again, which is tragic", she added.
The motion, which called for the “full restitution” of money transferred from school reserves into WCAT central accounts, was approved.
Councillors also agreed the trust should not dissolve until its affairs had been fully investigated and the results made public, and they are calling for "full transparency and democratic accountability to be restored" into the education system.
Coun Olivia Rowley, cabinet member for children and young people, said a public enquiry was needed.
Coun Rowley said: "People like the Regional Schools Commissioner should be questioned as to why she has allowed this to happen."
She added: "We really want action and we want to ensure that we have a democratic and accountable set up that doesn't allow this to happen in other academies either in this district or nationally."
WCAT made a shock announcement in September that it would cease running all 21 of its schools, including eight in the Wakefield district. The trust’s board said it didn’t have the capacity to bring about rapid improvement in the academies.
But questions have also been raised over the trust’s financial management and allegations include reports of monies being “drained” from individual school accounts to pay off the debts of the parent organisation.
Speaking in parliament earlier this month education minister Nick Gibb said the trust will not be able to retain any of its reserves once it has formally been dissolved. And in a statement, a DfE spokesperson said: “A failing academy trust must never profit from the re-brokerage of its schools.”
Asked about claims the trust had transferred money from its schools into its own central account, and that schools now face losing the cash as a result, a spokeswoman said: "Our priority is to make sure all children receive the best possible education, and it is because we wanted to see better and faster improvement for these schools that we stepped in.
“We will continue to discuss this with parents, governors, staff and MPs as we look to transfer all WCAT academies to new trusts by the end of the academic year, to minimise any disruption and ensure that these schools start improving and deliver the best outcomes for pupils."
All eight WCAT schools in Wakefield could be taken over by the Outwood Grange Academies Trust, the DfE announced last month.
WCAT were contacted but have again declined to comment, referring us instead to their September statement.