Mark Whitehead 24 September 2018

Review finds 'insufficient financial controls' enabled £2m council fraud

Review finds insufficient financial controls enabled £2m council fraud  image

The conviction for fraud of a former employee of a joint venture set up by Barnet council is a 'textbook example of why outsourcing fails', according to Labour.

Shadow communities secretary Andrew Gwynne, responding to the publication of the audit report on the £2m fraud case, said it showed the 'mass outsourcing experiment with our public services' had failed.

The report by Grant Thornton said there were insufficient financial controls in place for the outsourced finance and regeneration services.

Last month 38-year-old Trishul Shah, who was working as a capital investment manager for Regional Enterprise Ltd, set up by the council and outsourcing giant Capita, was jailed for five years.

He admitted two offences of fraud the result of 62 fraudulent payments on compulsory purchase orders in 2016 and 2017 totalling more than £2m.

The report by Grant Thornton said the council had insufficient oversight of the joint company which 'gave the individual access to cost centres on the ledger for illegitimate purposes'.

It said the council was aware of 'deficiencies in the governance arrangements' and had started work to address them, but it was not completed in time to detect or prevent the fraud.

Capita has pledged to underwrite the financial loss to the council.

Mr Gwynne said: 'In Tory-run Barnet, outsourcing has led to a litany of services problems, unstaffed library buildings, Ofsted ruling that the council is ‘failing vulnerable children’, and now accusations of major fraud linked to a Capita contract.

'Internal processes and monitoring clearly failed in this case - we urgently need action from the Government to ensure that this could not happen again.'

Highways jobs

Head of Audit and Governance

Tamworth Borough Council
Up to £49k + £5000 shared service allowance
Looking for people who are excellent communicators, are adventurous and who are inspired by our values... Tamworth, Staffordshire
Recuriter: Tamworth Borough Council

Divisional Manager – Revenues, Benefits & Customer services

Chichester District Council
£51,354 to £55,167
We are looking for an exceptional candidate to lead the Revenues, Benefits & Customer Services division. Chichester, West Sussex
Recuriter: Chichester District Council

Senior Team Leader

Redbridge London Borough Council
£35,992 to £38,994 per annum inclusive
Looking for individuals with initiative, evidence of experience in managing a street cleansing service and motivating... Redbridge, London (Greater)
Recuriter: Redbridge London Borough Council

Residential Keyworker

London Borough of Richmond upon Thames and London Borough of Wandsworth
£19,156 per annum
This is an exciting time to join the school. In our recent OFSTED of the residential department. London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Commissioning Manager

Camden London Borough Council
£40,829 - £47,360 per annum
Looking for an ambitious person who can communicate well and understands how to analyse and translate qualitative and... Camden, London (Greater)
Recuriter: Camden London Borough Council

Local Government News

Latest issue - Local Goverrnemnt News

The March issue of Local Government News explores alternative funding channels that are available to councils beyond the Public Works Loan Board, what hurdles merging councils face in coming together, and how local government is handling GDPR.

This issue also has a special highways and street lighting section exploring how councils can use lighting to embark on their smart city journey and using IoT technology to weather the storm.

Register for your free magazine