Poor governance and financial management left Maesteg Town Council vulnerable to a fraud that cost the local authority nearly a quarter of a million pounds, auditors say.
Between March 2016 and December 2019, the former Clerk of Maesteg Town Council defrauded the council of £238,000 – representing up to 27% of the council’s total non-pay expenditure in each financial year.
A report by Audit Wales has found that the local authority failed to exercise the minimum standards of financial management and governance, a failure that created an environment where fraud could take place relatively easily.
One example cited in the auditors’ report was the systematic failure to follow proper procedures when it came to signing cheques. Members of the council were required to sign cheques and check all invoices. However, the auditors found that some members just signed blank cheques.
The report also found that the council failed to established an internal audit system prior to 2019. The local authority also did not comply with the statutory timescale for submitting its accounts for audit.
Auditor general Adrian Crompton said: ‘Failing to carry out financial and governance checks and controls can have serious consequences for town councils. The fraud committed against Maesteg Town Council highlights just how important it is to establish effective internal control and internal audit systems and town councils across Wales can learn from this report to minimise the risk of this happening again.’
