Ministers need to take control of 'faltering' academy finances or let councils step in, local government leaders have urged.
The Local Government Association (LGA) says recent reports on academies facing financial problems shows the current system of oversight is not working.
According to accountants Kreston UK eight in 10 academies are in deficit and multi-academy trusts are failing because of poor financial governance.
The public accounts committee of MPs said recently that many academy trusts were failing to show the highest standards of governance, accountability and financial management.
And a recent report by the National Audit Office said the Department for Education should apply financial risk and due diligence tests to all academies and trustees.
The LGA says councils have 'vast experience' of dealing with school budgets and could make sure academies' books are balanced and any concerns are dealt with quickly.
Richard Watts of the LGA said: 'We urge the Government to get faltering academy finances under control, or allow councils to step in and oversee them, as they do with council-maintained schools that face financial challenges.
'The Department for Education cannot have effective oversight of spending in more than 7,000 academies.
'It says that academy finances are under stricter control than council-maintained schools, and that they are in better financial health.
'But the figures, where they are available, show that many academies are running up deficits and there are serious questions about financial governance in many academies.'