The sponsor of a newly opened Kingston school has been issued a financial notice to improve by the Education Funding Agency.

Chapel Street Community Schools Trust, which set up the Kingston Community School, said staff had been appointed to address the issues before concerns were raised.

Kingston Community School opened its doors for the first time in September last year, and is still in the process of securing planning permission for a permanent site to be built.

Sue Baldwin, director of academies and maintained schools group at the EFA, said in a letter to Russell Rook, group chief executive office of Chapel Street Community Schools Trust it was the second time additional funding has been requested.

She said: “The trust’s request for urgent additional funding has raised significant concerns about the financial management of the trust.

“I do acknowledge the recent changes in trust level leadership, but the lack of advance warning of this impending cash flow deficit indicates that the trust does not have full knowledge and control of their academies’ financial positions.”

Kingston Community School said it would not comment.

A spokesman for the trust said: “The financial challenges experienced by the trust in the last months have almost entirely been the result of the higher than anticipated investment required to transform one previously failing school [Benedict Primary School in Mitcham] – a project that is already demonstrating significant success.

“We are extremely proud of the tremendous progress across all Chapel St schools and the verified improvement in educational standards that we are helping to achieve. We look forward to working with the EFA to ensure that our schools have the resources and support that they need to thrive even more in the future.”

Opposition leader councillor Liz Green said the notice is “hugely worrying”.

She added: “Kingston Community School is still in its first year and yet there are clearly difficulties." It has no planning permission for a permanent school building and now we have the added concern that the trust is unable to manage it’s finances effectively.”