Ten thousand pounds was taken from a school's budget to pay staff it doesn't employ and teachers' pensions haven't been paid because of failures in the council's new finance system.

Headteacher Carl Leech told of the shambles and lack of support his school has faced since the Best4Business HR and finance IT system was introduced by Cheshire East Council.

And he told the council's audit and governance committee on Thursday he believes the system is open to abuse.

"Two members of staff from other Cheshire East schools have been paid from my school's budget over a number of months," the Rode Heath Primary School headteacher said.

"If the system allows users from different institutions to add employees to payroll then it's my belief that this is open to misappropriation of funds."

And he asked the committee: "Are you aware of the issues that continue to undermine the Best4Business System? What steps have you taken as  a committee to ensure the independent monitoring of financial standards?"

The Best4Business system is used by Cheshire East and Cheshire West and Chester councils, a number of schools and some of the Cheshire East's wholly owned companies.

Mr Leech said: "The total inappropriate payment was about £10,000. It's been identified now and it will be returned, but how can a system allow a member from another institution to put someone on the payroll?"

He said issues kept arising and listed a catalogue of errors including one staff member being paid just 10 per cent of her salary – and then another error was made on her wages the following month.

"[There was] the failure of Best4Business to send the information to the Department for Work and Pensions, so a number of my staff were worried about their universal income credits – they were phoned, they were asked to attend meetings like they weren't in work," said the headteacher.

"The latest one being that the teachers' pensions have not been paid for a number of months."

Mr Leech said there was a general email address for support but a complete lack of communication.

It took him four days to get through to 'a human'.

He said it's causing ongoing mental anguish among staff who now feel something is going to go wrong again and they're powerless to act.

Jane Burns, the council's  executive director of corporate services, said she couldn't answer the specific payroll question but would take it to the transactional service centre which runs it for Cheshire East and Cheshire West councils.

"We are aware of a number of issues and the transactional service centre team are working really hard trying to address those," she said, adding an email had been sent to all schools last month which did contain names of contacts.

"We've got a complete commitment from both councils to work with you (schools) to resolve these issues.

"I do appreciate the frustrations and apologise."

Former council leader Rachel Bailey (Audlem, Con) said the matter needed looking into by the committee.

"This committee has had some very clear questions put to it today, including misappropriation of funds. As an audit and governance committee I do feel we have to discuss and follow up on those questions at some point," said Cllr Bailey.

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