Severe Failings in Monetary Administration and Governance Discovered at City Council

The Council’s failure to hold out their very own monetary controls created an setting which may very well be exploited to defraud, in response to the report within the public curiosity issued in the present day by the Auditor Common for Wales.

Underneath the Accounts and Audit (Wales) Rules 2014, the Council is liable for putting in correct monetary administration and inner controls. Nevertheless, these preparations are solely efficient if they’re operated correctly. When Councils fail to implement correct monetary preparations, there’s a danger of loss to the general public purse, and that is seen within the case of Maesteg City Council. Our report within the public curiosity discovered that the Council did not train the minimal requirements of economic administration and governance anticipated of a city council.

Between March 2016 and December 2019, the previous Clerk of Maesteg City Council defrauded the Council of £238,000 – representing as much as 27% of the Council’s complete non-pay expenditure in every monetary 12 months. Failing to comply with correct monetary procedures created an setting wherein the previous Clerk was in a position to exploit to defraud. Council members serving throughout the former Clerk’s tenure did not correctly scrutinise the monetary data introduced by the previous Clerk.

As a part of their monetary and governance preparations, the Council required all cheques to be signed by members, who must also have checked all invoices. Nevertheless, members who have been cheque signatories did not comply with correct course of, together with signing clean’ cheques, subsequently facilitating the fraud dedicated by the previous Clerk.

Our report within the public curiosity additionally discovered different important failings by Maesteg City Council. These included failing to ascertain an satisfactory inner audit system previous to 2019 and failing to adjust to the statutory timescale for submitting its accounts for audit. There are additionally important inconsistencies and omissions within the Council’s accounting programs and information.

The report outlines a number of suggestions for Maesteg City Council, together with:

• Guaranteeing that its correct inner controls together with authorisation of funds, are adopted by all members.
• Setting up correct scrutiny for the work of the Clerk and Deputy Clerk.
• Implementing the suggestions made by its inner auditor in 2020 and be certain that the processes put in place are working successfully.

Auditor Common, Adrian Crompton stated in the present day:

“Failing to hold out monetary and governance checks and controls can have critical penalties for city councils. The fraud dedicated towards Maesteg City Council highlights simply how essential it’s to ascertain efficient inner management and inner audit programs and city councils throughout Wales can study from this report back to minimise the danger of this taking place once more.”