The auditor’s report on Longstanton PC

Alex Riley

Cllr Alex Riley gives his take on the auditor’s report into the activities of Longstanton Parish Council prior to the May 2012 elections. With losses in excess of £90,000 – to be met by parish council-tax payers – there is little to relieve the gloom.

(from Cllr. Alex Riley)
The long-awaited report on the mismanagement of our parish council before the May 2012 elections has now been published. The Auditor considered the situation so serious that he took the rare step of reporting it to the Audit Commission.

The auditors are externally appointed and completely independent. They have no connection to either the parish council or the village in general. The Report will be discussed at the next ordinary meeting of the Parish Council on next Monday 14 October at 7.30pm.

I have had numerous requests from residents for details about how these huge losses could have come about and who was responsible. This represents a summary and is my personal view. It leaves a lot out! Though it claims to be an audit for the 2011/12 financial year, the Report actually goes back further and deals with the taking over, in October 2010, of the old Sports and Social Club (LSSC) to turn it into the Pavilion.

The losses described in the Report amount to £66,000, but this is not the whole story. A payment of £4000 was made by the PC in October 2010 for LSSC’s fixtures and fittings (included in the 2010/11 accounts). The estimated bill for this Auditor’s Report is £9,500 + VAT and about the same has been spent since May 2012 on legal fees to resolve the mess bequeathed to the current PC over the former clerk. The VAT bill of £21,000 has been agreed with HMRC, but the level of fine for non-payment has not yet been set. So the total figure for this fiasco will exceed £90,000. That is an average of £70 per Longstanton household.

In the period before May 2012 the council appears on occasion to have been driven by ignorance and arrogance in equal measure. Particular councillors claimed expertise in areas they clearly knew nothing about, with catastrophic consequences. There was a general failure to manage the PC’s affairs. It beggars belief that the PC took over the LSSC at a time when pubs are closing all over the country and no-one in the council had the slightest idea of how to run a pub. It was also (para 13.1.1 of the Report) illegal.

From that point on, until May 2012, no action was taken by the PC under various Chairs to create a business plan for the Pavilion, monitor its performance, rein in its expenditure, or manage the staff. Taking professional advice over the prior employees of the LSSC, and then ignoring it (para 5.4) is similarly incomprehensible – it cost £16,000. The council was twice advised that it had to register for VAT, but did not do so.

With no idea about the requirements for a professional kitchen, £8,000 was spent buying some items on eBay (itself illegal for a PC) and having them installed. This led to increased expenditure on staff and increased losses. This “kitchen” was subsequently declared unfit for purpose by SCDC Environmental Health Department.

In para 13.3.2 the Report points out that in March 2012 the council was actually insolvent, but took no action – another breach of the law.

Though the great majority of losses incurred by the PC relate to the Pavilion, para 6 of the Report deals with irregular payments totalling £15,000 made to the clerk. Normally the clerk’s salary payment is agreed at every meeting, held on the 2nd Monday of each month. At some stage the PC agreed that a standing order of £1,000 should be paid to Pauline Haywood, the then clerk, on the first of every month, in order that she could always guarantee to pay standing orders. The balance would then be paid in a cheque at the meeting of the PC. Of itself there is nothing untoward in this arrangement. However, the fact that two payments were made every month was never disclosed in meetings or minutes. Why did council members, and in particular the Chair, not draw our attention to this fact? What then happened was that the clerk suffered repeated memory loss and paid herself her full salary, plus the £1,000, 15 times in all. She was subsequently dismissed by the current PC for gross misconduct.

Whilst this loss was directly caused by the former clerk, it was only because of the then council’s negligence that it was not picked up. The Parish Council takes out insurance to protect it against fraud by any employees. Its insurers refused to reimburse the £15,000, on the basis that the PC had not followed its own financial regulations. The Police refused to commence criminal proceedings against the former clerk because the clerk had issued the PC with a spreadsheet which actually showed all the additional sums that had been paid to her and the PC had signed it off.

The Report reflects badly on all those who were involved on the parish council during this period, and I know that several councillors resigned when they realised what was going on. The individuals who cannot shirk their responsibility for this mess are those who chaired the PC over the period between October 2010 and May 2012. I cannot believe that these individuals would wish to stand again for public office locally, but two of them deny any personal responsibility and seek to blame everything on the former clerk. So if they ever again held public office one can only assume they would behave as in the past. The Report makes clear that they cannot duck their responsibilities. The blame lies with the council, not its employee.

The Auditor points out in the Conclusions to section 13.1 that he could have instituted legal proceedings, but decided not to. He doesn’t precisely describe what he meant. Many residents would be delighted for proceedings to be brought against the culpable individuals, but No! The only proceedings that could have been brought would have been against the CURRENT (wholly innocent) PC! So we should be grateful that at least we were spared an additional fine (which of course would have been added to our rates).

The Cambridge News has published its own story on this. Over the past year or so the News has seemed to me to try to de-emphasise the guilt of earlier parish councils whilst almost implying the guilt of the current one. This time they have really gone too far. The one picture they show is a poor snapshot of our current PC Chair, whose only involvement in this sorry mess is the determination she has shown to get on with it and dig us out of the mess. The News should be ashamed of this shoddy journalism.

This is indeed a sorry business. We owe a debt of gratitude to the current PC which has worked so hard to uncover the truth of what happened previously and is still determined to get on and implement the daunting list of Auditor’s Recommendations.

Alex Riley

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