Flagship Perry Beeches Academy Trust paid Labour Party £5,000

Former Prime Minister David Cameron and then Education Secretary Michael Gove were at the opening of Perry Beeches III free school in 2013

A flagship academy chain gave £5,000 to the Labour Party and spent £20,000 with a consultancy firm run by the wife of a school director, a report has found.

Perry Beeches Academy Trust, once praised by ex-prime minister David Cameron, has been criticised by watchdog the Education Funding Agency.

It breached Charity Commission regulations by sponsoring the Labour Finance and Industry Group. The money has since been returned, the EFA said.

The trust has adopted recommendations.

The EFA investigated the trust - which runs five schools in the city - in March after allegations of "novel and contentious use of trust funds and assets" and irregular expenditure.

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Information from a whistleblower prompted the investigation, which found an additional salary of £160,000 was paid to chief executive Liam Nolan, over two years, through a third-party agreement - on top of his £120,000-a-year salary. He resigned in May.

Chief executive of Birmingham's Perry Beeches Academy Trust Liam Nolan reigned in May

The agency's full report, revealed on Thursday, details breaches and failures by the trust to follow its procurement processes.

It looked at how contracts and jobs were awarded and highlighted the employment of Mr Nolan's nephew and niece, the latter being promoted six times in three years.

There was also no evidence of tendering for contracts for legal and PR services worth thousands of pounds or reasons for the payments.

EFA key findings:

• Between September 2013 and January 2015, the trust spent £2,227 on meal expenses or dinners at political-related events, including £205 in a brasserie after a trip to 10 Downing Street with insufficient evidence to explain what the trip was for

• The starting salary for the nephew of the accounting officer appeared to have been determined by the accounting officer, Mr Nolan, who was also the chief executive, by a sticky note with his initials on. The note was kept in the employee file

• The chief executive's nephew received 50% funding - £2,700 - towards the costs of an Open University degree course

• The hiring of a PR firm at a cost of £450 a day for four days a month at the time critical EFA reports were published, did not follow the trust's procurement process and breached the Academies Financial Handbook

• The trust was going to pay £5,000 in sponsorship for a political fundraiser in January 2015, however, this was not actually paid

In a statement the trust said the report related to historical allegations and board of trustees resigned in April and a new management structure was in place.

The new team has been working "very closely" with the EFA and department for education "to move Perry Beeches The Academy Trust and its schools forward to a better future".

"All recommendations in the report have been adopted by the trust," the spokesman added.