Showing posts with label National Audit Office. Show all posts
Showing posts with label National Audit Office. Show all posts

Tuesday 5 September 2017

Brent Council and Cara Davani – something has happened!

Guest post from Philip Grant


Wembley Matters readers still following this long-running saga might be interested to know what has happened since the last update I gave at the end of June. LINK
The auditor, Andrew Sayers of KPMG, finally sent his ‘provisional view and material documents’ letters to the five Brent residents, who had objected to the Council’s June 2015 leaving payment of £157,610 to Cara Davani, on 3 August 2017. The final paragraph of his letter reminded me that the “disclosure of information” provisions (Schedule 11) of the relevant legislation still apply to his enquiries. I am therefore restricted as to what I can tell you, as ‘failure to comply with Schedule 11 is capable of amounting to a criminal offence and liable to a fine upon summary conviction.’
When we read his ‘provisional view’, the same word sprang to the minds of three objectors. It was not an expletive, but I can give you a clue without disclosing any of the contents of the letter. The OED definition of the word is: ‘a liquid containing quicklime or powdered chalk, used for painting walls or ceilings etc.’
Still, we were not disheartened, as the auditor’s letter stressed that this was only his provisional view. He had not reached any final view, or decided our objections, and would not do so until he had considered any additional comments or evidence that the objectors or the Council might wish to provide.
However, when I looked at the “material documents” which the auditor had sent with his letter, I found that these did not include any of the documents we had been expecting to receive, since they were handed over to KPMG by the Council last December. There was only one “material document” which did relate to the payment to Ms Davani, and as that document is already “in the public domain” I am allowed to tell you about it, or you can read it for yourself. LINK
Why are the 30 June 2016 minutes of Brent’s Audit Committee a “material document” in considering objections against the £157,610 payment to Cara Davani? Because at item 7 (Draft Statement of Accounts 2015/16) they contain a brief explanation of the reason the payment was made, and of the legal advice on which it was based.
But if a Council Officer had explained everything about the payment in June 2016 (in the first public admission of such a payment, a year after it had been paid), why had five local electors objected in August 2016 to that payment being included in the accounts? Surely the primary documents from May and June 2015 should also be treated as “material documents”, and shown to the objectors so that they could provide comments, and any counter evidence, in support of their objections!
I was not able to persuade the auditor with this argument, when I put it to him on 4 August. Nor did his position on this change when I drew his attention to the relevant guidance issued by the NAO, “Auditor Guidance Note 4” (AGN 04), which he is meant to follow, later in the month. Para. 36 of AGN 04 says:
‘Sharing material information and inviting representations on it is required in public law as the auditor is exercising quasi-judicial powers.’
I was arguing that the primary documents (which the auditor holds) about the £157,610 payment must be “material documents”, so should be shared with the objectors before we made our comments. The auditor said that he would look at our comments (which he had first asked for within three weeks, but then agreed an extra week, with a 31 August “deadline”), and if he then considered those documents to be “material”, he would share them with us and give us the opportunity to comment on them. I summed this up to him as:
‘What you appear to be saying is: 'I won't share material information with you now, but after you have made any representations I might share some of the material information with you (and if I do, I will give you the chance to make some further representations).'
As the “deadline” was fast approaching, the objectors had to submit the best ‘additional comments and evidence’ that we could in the circumstances. One of the points I was able to make was that the summary of the May 2015 legal advice, as given to the Audit Committee, showed that the point the QC had been asked to look at was “unfair dismissal”, if Brent had sacked Cara Davani. At a meeting with the objectors last December, the Chief Executive referred to a document Ms Davani had given to the Council at the time. This strongly suggested that the point the QC should have been asked to look at was “constructive dismissal”, which may well have produced different advice, and not led to any payment to her.
We have not been allowed to see Cara Davani’s “statement of loss”, and even if we had I would not be allowed to tell you what it said, but I did refer to it in a “guest blog” in January. LINK :-
‘We asked for more information about the circumstances which gave rise to Cara Davani leaving Brent. When Ms Downs provided a brief outline of the grounds on which the former HR Director claimed she was entitled to compensation from the Council, the objectors expressed their incredulity. I am sorry that details have to remain confidential for now, but I can say that we asked Ms Downs whether she was joking, and she said that she was not!’
I can assure you that the objectors have done their best to provide the auditor with information about a pattern of abuses of power at the top of Brent Council from 2012 onwards, which came to a head with the, we allege unlawful, payment of £157,610 to Cara Davani in 2015. I have also provided evidence to show why that payment was really made (and how the Officer who provided the “official” explanation to Audit Committee was, like the Council itself, the victim of a deception).
I have been greatly helped in piecing together my researches over Brent Council and Cara Davani by comments, many of them anonymous, which Wembley Matters readers have made in response to blogs by Martin and myself since 2014. Thank you, everyone, for the parts you have played in allowing the objectors to lay the evidence before the auditor. There is a strong case for the auditor to make a Public Interest Report, to bring this matter into the open, so that key figures at Brent Council, past and present, can be asked to explain their actions, and be held to account. We shall have to wait and see whether Mr Sayers will now make that report.
Philip Grant.

Sunday 23 July 2017

Murky figures at HS2 as public money goes down the drain

The figures associated with the HS2 project are so vast that they are hard to grasp. The world's most expensive railways at £400,000,000 per mile LINK with experts predicting a doubling of total cost to £104bn suggest the project is a high speed white elephant, particularly as the government has quietly ditched plans to improve current rail routes.

At the same time Carillion, one of the main contractors appointed by the government, is facing its own financial crisis and has lost its Chief Executive in the process. LINK

Fears about the reliability of HS2's figures have not been helped by the National Audit Office's recent findings about unauthorised payments by the company.  They spent £2.76m on pay-offs in 2016 of which only £1m was authorised.  The redundancy payments were prompted by a head office move and reorganisation and were made above the civil service cap of £95,000 despite advice from the Department of Transport.

The Guardian LINK reports that HS2 circumvented the cap by placing highly paid staff on gardening leave and continuing to pay them for several months despite the fact that they were no longer working and adding the maximum payout.  67 staff were made compulsorily redundant at a total costs of up to £916.000 when statutory compensation would have totalled between £55,000-£115,00. A further 27 staff were given voluntary redundancy packages worth £1.84m with 8 people on a salary of more than £150,000 receiving up to £200,000  each.

This is of course public money.

The HS2 Director of Financial Operations is Clive Heaphy, former Director of Finance and Corporate Services at Brent Council. Previously he was Interim Director of Finance at Ofsted under Christine Gilbert, later CEO of Brent Council.

Heaphy left Brent Council after negotiating an exit payout of £145,508. LINK

Tuesday 8 September 2015

'Significant risks' attached to academy accounts warns National Audit Office

From the Local Schools Network LINK by Janet Downs

The National Audit Office has warned of ‘significant’ risks attached to academy accounts in a letter to auditors LINK. These include:

CAPITAL RISKS

1    The expansion of the capital programme in 2014/15 involves different ways of acquiring land such as buying freeholds or leasing.

2    There’s a risk these ‘ownership arrangements’ aren’t identified correctly and are included in the wrong accounts.

OTHER MATTERS

There is an ‘inherent risk’ of ‘material or systematic irregularity’ across the whole academies sector because of the ‘number and variety of providers’. The NAO is particularly concerned that:

1    Academy trusts don’t always seek approval from the Education Secretary for transactions which trusts aren’t delegated to make.

2    Related-party transactions might not be ‘arms-length’ or ‘at cost’.

3    Fraud or misuse of funds, especially at ‘trust level’ in Multi-Academy Trusts (MATs), could take place.

4    Academies with long-standing deficits could become insolvent.

The NAO has listed factors which it wants academy auditors to consider when identifying whether there is a ‘risk of irregularity’. These include:

1    Heads ‘using academy funds for personal gain’.

2    ‘Inappropriate expense claims’ for staff or trustees.

3    ‘Unjustified salary increases’.

4    Weak controls at trust level over activities of individual academies within MATs.

5    Transactions which breach the Academies Financial Handbook.

6    Weaknesses in procurement (including employment or related-party transactions).

The letter to auditors asks them to notify the NAO if they identify ‘significant risks of material misstatement’ in academy accounts.

AUTHOR’S COMMENTS

The number of academy trusts, MATs and sponsors is continues to rise. And Education Secretary Nicky Morgan has pleaded with businesses to run academies. But the NAO already has significant concerns about risks linked to the present ‘number and variety’ of providers.

It appears these serious misgivings are not enough to prompt a rethink. On the contrary, the Education and Adoption Bill will make it easier for the Government to push forward academy conversion. This is despite an earlier NAO report finding formal methods such as academy conversion were less effective in improving struggling schools than informal methods such as local support. And an even earlier NAO report (2010) which warned about potential conflicts of interests between sponsors and their academies.