PROSECUTORS are considering whether criminal charges will be brought against a private company accused of misusing money for at-risk children.

A Scotland Yard investigation into whether EduAction, the firm which until recently ran schools in Waltham Forest, siphoned off public money into its coffers to meet bonus-led profit targets has entered its final stage.

The company was commissioned in 2004 to run the Youth At Risk programme in the borough's most deprived areas using hundreds of thousands of pounds from the council's Neighbourhood Renewal Fund (NRF).

Whistleblowers later claimed that, despite EduAction records showing vulnerable children had been helped, the resources were never forthcoming.

The Crown Prosecution Service is now reviewing allegations of wrongdoing which, it is understood, include the testimony of a former EduAction employee.

A source close to the original council investigation said EduAction had failed to provide proof that it had fulfilled its contractual obligations. The findings have never been made public.

The company says its own investigations revealed no evidence of fraud.

George Mitchell School in Leyton is in one of the borough’s most deprived wards and was supposed to receive support through Youth At Risk.

Headteacher Helen Jeffrey remains angry that the school did not receive vital help, despite documentation showing otherwise.

She said: “With a school that has as many challenges as our school has, I'm still smarting from the fact that we did not benefit from the NRF funding through the Youth At Risk programme when we should have done and were reported to have done.”

The council's long-term mismanagement of millions of pounds earmarked to help the poorest parts of the borough is currently the subject of an independent inquiry.

Evidence shows council officers, many of whom remain employed by the authority, bypassed rules aimed at preventing the mis-use of public funds.

At least one senior council officer has been suspended as part of the investigation.

Since January 2005, council anti-fraud investigators received 267 complaints of wrongdoing, a Freedom of Information Act request has revealed.

Of those, 65 have not been completed, including allegations classified as corruption, theft, financial wrongdoing, financial irregularity, abuse of position, false documentation, false accounting and breach of contract.