Showing posts with label Paul Lorber. Show all posts
Showing posts with label Paul Lorber. Show all posts

Thursday 25 January 2024

Barham Park Trustees approve original accounts in 7-1/2 minute meeting after refusing representations

 

The Barham Park Trust Committee, made up solely of members of the Brent Cabinet and chaired by Brent Council leader Muhammed Butt, took just 7 and a half minutes to deal with the CEO's 'High Level' review  report into the accounts and the Scrutiny Committee's Report made as a result of the Call-in of the Barham Trust accounts by backbench councillors.

That evening the CEO of Brent attending Scrutiny Commitete seemed reluctanmt (after a slight panic) to reflect on the content of the report when requested by Cllr Anton Georgiou.

 

 Councillor Butt was not paying much attention while the CEO was speaking!


Cllr Butt refused Cllr Georgiou's colleague, Cllr Paul Lorber's request to address the Trustee's at the Barham Park Trust Committee.

This triumph of open government and transparency resulted in the accounts as originally submitted being approved. There was a short reference to the need to collect rents - an issue that Cllr Lorber had first raised as the amounts shown in the accounts was much lesss than the rents due from the occupants of the Barham Park buildings.

The correspondence below speaks for itself - it all took place on January 23rd :

Philip Grant correspondence

This is the text of an email that I sent to Cllr. Muhammed Butt just before 5pm today. It was copied to the other four members of the Barham Park Trust Committee, to Brent's Chief Executive and Corporate Director of Governance, and to Cllr. Lorber:

'Dear Councillor Butt,

I have read online that you have refused a request from Councillor Paul Lorber to speak in respect of items 5 and 6 on the agenda for tomorrow morning's meeting of the Barham Park Trust Committee. Is this true?

If it is true, I am writing to ask, as a citizen of Brent interested in the workings of democracy, that you change your mind on this, and let Cllr. Lorber know, without delay, that he will be permitted to speak to the committee.

What your Committee has to decide is whether to reconsider its acceptance of the Barham Park Trust Annual Report and Accounts, as it has been requested to do by the Council's Resources and Public Realm Scrutiny Committee.

Surely it is right that the Trust Committee hears all sides of this matter, before it makes its decision? That is the essence of openness and transparency in decision making which underpins our democracy.

Not to allow Cllr. Lorber to speak, as long as he does so respectfully, as required by the Members' Code of Conduct, would reflect very badly on Brent Council, and on yourself.

 

Within 15 minutes of sending the email in "FOR INFORMATION" above, I received the following reply from Cllr. Muhammed Butt:

'Dear Mr Grant

Thank you for the email and for trying to make the case.

I respectfully have to say the answer is no and will remain a firm no.

Regards

Muhammed

Cllr Muhammed Butt
Leader of Brent Council.'

 

I did not find that a satisfactory response to the points I had made, so I sent the following reply (copied to the same people as my first email) just after 6pm this evening:

'Dear Councillor Butt,

Thank you for your prompt reply to my email.

As you acknowledge, I made a case for Cllr. Lorber to be allowed to speak at tomorrow's Trust Committee meeting.

You have said that 'the answer is no and will remain a firm no', but you have not explained your reasons for that.

I'm aware from watching previous Council meetings that there is "no love lost" between yourself and the former Lib Dem Leader of Brent Council. However, personal animosity should not influence your actions as Chair of the Trust Committee (if that is a factor in this case).

Have you taken advice from the Corporate Director for Governance over whether to block Cllr. Lorber's request to speak? Although you may have the power, as Chair, to refuse his request, it could be seen as an abuse of power.

Any councillor, and especially a Leader, is expected to demonstrate leadership by example. I have to say that this appears to me, as an independent observer, to set a poor example.

 

Yours,

Philip Grant.

 

Further to my two "FOR INFORMATION" comments above, I received the following email from Cllr. Butt at 7pm this evening:

'Thank you, Mr Grant.

I wouldn't describe the sharing of these exchanges to the Green Party blog to be either "independent" nor the definition of the public arena either - but what you do them with is your prerogative.

Cllr Lorber and I perfectly understand one and other, we have been colleagues on different sides of the council chamber for two decades and I am grateful as ever for his continued opinions on the matter, as is his right. It is also perfectly within mine to disagree.

I am clear there has been ample democratic opportunity and copious officer time and resource afforded to the matter. This item has been discussed at both the initial Barham Park meeting and at a subsequent scrutiny call-in meeting where there was repeat opportunity for all members and members of the public to contribute.

Given this is a reference back of a decision called in by Cllr Lorber the meeting will continue as planned.

Best wishes and thank you for your continued interest, please feel free to tune into the next meeting of the next Barham Park Trust meeting.

I wish you all the best and thank you for your continued interest.'


I sent the following reply to the Council Leader at 7.15pm:

'Dear Councillor Butt,

Thank you for your email, and fuller response.

The point I am trying to make is that, although the matter of the accounts has been looked at in various ways, the meeting of the Barham Park Trust Committee tomorrow is meant to be reconsidering its original approval of the 2022/23 Annual Report and Accounts, on a referral back from a Scrutiny Committee.

If the Committee is not allowed to hear both sides of the case before making its decision (even though your own mind may already be made up?), that does not reflect well on Brent Council's democratic process. Yours sincerely,

Philip Grant.'

 

This is the final exchange of emails between Cllr. Butt and myself this evening.

His email highlighted some of its text, and I will put that section in inverted commas:

'Dear Mr Grant

I think you have missed the point that I made to yourself, so I have highlighted it for you for clarity.

"I am clear there has been ample democratic opportunity and copious officer time and resource afforded to the matter. This item has been discussed at both the initial Barham Park meeting and at a subsequent scrutiny call-in meeting where there was repeat opportunity for all members and members of the public to contribute."

I wish you a good evening.'

This was my reply, shortly afterwards:

'Dear Councillor Butt,

Thank you for your email.

I had noted the point you have highlighted, but feel that you are also missing the point.

However, as our exchanges are, unfortunately, getting nowhere, I will also wish you a good evening. Yours,

Philip Grant.'

23 January 2024 at 19:46

 

Paul Lorber correspondence

 

In my discussions with the Brent Chief Executive and the Brent Director of Finance I made it clear that one of the beneficiaries of the mistakes made by the Trustees and Council Officers was a charity - Friends of Barham Library - of which I was a Trustee. I was urging them to correct their errors in the full knowledge that it will cost Friends of Barham Library money.

One of the material errors made by Council Officers, which the Trustees, including Cllr Butt, failed to spot was the failure to implement Rental reviews as set out om the various Leases between The Barham Park Trust and a number of the organisation (including friends of Barham Library) who rent premises in Barham Park.

What is wrong with the Barham park Trust 2022/23 Account No.5 deals with this point.

While throughout this process Cllr Butt and his fellow Trustees refused to accept that there was anything wrong at precisely 20.11p.m. (some Council Officers do work late) an officer from the Council's Property Department sent me an email to advise me that Friends of Barham Library will be subject to a rent review under the terms of our Lease backdated to October 2021.

I received this email just 36 hours before the Barham Park Trust Meeting due to start at 9:30am on Wednesday 24 January and after Cllr Butt refused my request to speak so that I could explain why the Accounts are wrong and what action was required to correct them.

Brent Council Officers have been charging the wrong rent to one of the tenants in Barham Park since 2019. Friends of Barham Library rent has been wrong since 2021. I have been pointing this out to the Trustees and to Council Officers for a very long time.

Assuming that the other tenant was sent a similar email and demand for back dated rent the Barham Park Trust will be better off by over £18,000.

To date neither Councillor Butt or the Council Officers have had the decency to admit that I was right or to acknowledge that as a result of my actions the Barham Park Trust is at last trying to retrieve some of the losses suffered as a result of their basic mistakes.

In contrast to the Accounts prepared by Council Officers for the Barham Park Trust which are wrong - the Accounts for Friends of Barham Library are correct. We knew what our correct rent should have been since 2021 and provided (accrued) for the extra rent due in our accounts for the last 2 years.

Councillor Butt may ignore the sensible contribution from Philip grant or silence me and others. He cannot hide the fact that he is WRONG and we are RIGHT.

Perseverance pays off (as the belated Council action about the rent reviews highlights) and the fight goes on.

 

 


Monday 22 January 2024

Cllr Lorber presses case on Barham Park Trust accounts despite CEO's 'high level' review

 Both the Barham Park Trust Committee and the Resources and Public Realm Scrutiny Committee meet on Wednesday January 24th.  The former includes the 'High Level Review' of the Barham Park accounts promised by Kim Wright, Brent's new CEO at the special call-in Scrutiny Commitee held on October 26th  to consider issues around the accounts (Minutes of the meeting).

 

Extract from CEO's Report LINK:

 

I am satisfied that the objectives and scope which I set for the review have been met. Furthermore, I am satisfied that the review did not identify any material issues relating to the accuracy of the accounts. However, there have been areas identified where the accounts could be presented in a more clear and transparent way moving forward. This is particularly in the way rental income is presented and how the netting off of income and expenditure is shown.

 

3.9 There were also some helpful observations made regarding operational practices concerning the running of the Trust which could impair, or be perceived to impair, the Council’s arm’s length relationship with the Trust. In particular:

1. The trust not having its own bank account (up until recently);

2. The award and management of NCIL funds for park improvements being managed by the Council;

3. A lack of rent reviews undertaken by the Trust owing to the ongoing feasibility study commissioned by the Council;

4. Cash advances being paid to the Trust for rents overdue.

 

3.10 I have discussed these actions and observations with the appropriate officers, and all have agreed to implement the actions. In addition, whilst the rationale for the practices set out at 3.9 is clear existing practices are neither improper nor have any impact on the accuracy of the accounts, I have asked officers to review its management of the Trust to ensure that appropriate segregation and separation is in place where appropriate to clearly distinguish between activities of the Council and activities of the Trust,

 

Cllr Paul Lorber, one of the councillors instigating the Call-in is not satisfied and requested to speak at the Barham Park Trust meeting. The chair of the Trust, and leader of the Council, Muhammed Butt refused his request.

 

Cllr Lorber then wrote to all Brent councillors making his case:

 

Dear Colleagues

 

If you see mistakes and wrong doing you should never be afraid to speak up. You should also not allow yourself to be fobbed off.

 

At successive meetings of the Barham Park Trust I highlighted the errors in the presented 2022/23 Accounts. The 1st version of the accounts went to a meeting on 5 September and had to be withdrawn at the last minute. The revised accounts presented to a reconvened meeting on 26 September did not make much sense either.

 

At a subsequent meeting of the Scrutiny Meeting I made the point that those misleading and inaccurate accounts hide the truth of how the Barham Park Trust Charity financial affairs have been mismanaged - making the point that the mismanagement has cost the Charity around £100,000 - with on going losses going forward.

 

You will see from the Agenda of a reconvened Barham Park Trust Meeting that the Chief Executive commissioned a “high-level consultancy based review” relating to the concerns and issues raised.

 

The Chief Executive then explains that the review was NOT intended to do - it “was only ever limited to a narrow scope…”

 

The aim of “high level reviews” “of limited scope” should be obvious - not to uncover anything embarrassing and to protect senior Councillors and officers of the Council at all costs.

 

The Barham Park Trust Charity exists because 87 years ago a resident of Sudbury donated his home and gardens for the enjoyment of local people in our area.

 

He entrusted the management of his gift to the local Council - first Wembley BC and later it’s successor - Brent.

 

We all - Councillors and Officers - have a joint duty to look after and protect the bequest from Titus Barham.

 

I take my duty seriously and have tried to engage both with the Trust Committee and Council Officers to help to highlight the mistakes they made so that correct Accounts are prepared and ongoing losses being sustained by the Charity are stopped.

 

I requested the right to speak at the meeting on 24 January. The Chair has refused my request to speak.

 

Prior to that refusal I prepared a written submission to assist the Committee in their deliberations on the 24th and ask some searching questions of the officers.

 

Mistakes can happen. I will not criticise Councillors or Officers for making mistakes as long as they correct them when they are pointed out to them.

 

I will not however accept or tolerate mistakes which those in power and authority then try to cover up.

 

Cllr Lorber sent two documents with his email that are embedded below:

 

 

 

 

 

 


Saturday 28 October 2023

Barham Park accounts: Cllr Lorber provides evidence for claim of £100k combined loss to the Trust

Following the Scrutiny Committee hearing of the call-in over the Barham Park Trust accounts, Paul Lorber has given me permission to reproduce his letter to Kim Wright, Chief Executive of Brent Council:

 

I am writing to summarise my continuing concerns about the losses suffered by the Barham Park Charity as a result failures of the Councillor Trustees and by Officers of Brent Council.

I will deal with the saga of the ‘changes template/style of the 2022/23 under separate cover.
 
One Cabinet member and two other Labour Councillors expressed the view that yesterday’s scrutiny meeting was a "waste of time and money". Since the system of Scrutiny was set up by a Labour Government with the aim of holding decision makers to account these views are surprising and undermine the democratic process and bring it into disrepute.

You told me a while back, in response to my numerous concerns about the Barham Park Trust (BPT) Accounts and loss of income, that an independent audit was to be carried out. I had asked a while back about the scope of that audit and who would undertake it. I was interested because I would wish to make a detailed submission to that person.

As you know I have been expressing my concerns for some time and engaged with officers to get proper answers to my concerns. Sadly these have not been forthcoming. I also made an in advance request to speak at 26 September meeting of the Barham Park Trust which dealt with the accounts deferred from the meeting of 5 September on the grounds that a wrong form was used. I was denied the right to speak and the ability to point out numerous mistakes made by various units of the Council.

The revised accounts - supposedly on the better "received and paid" basis were approved without any questions or review by the Trustees I had no choice but to initiate a call in to Scrutiny.

At Scrutiny one of your officers intervened every time any member wished to ask about figures in the accounts on the grounds that Scrutiny Members could not ask "any operational questions". This seemed bizarre as all numbers in those accounts were the direct result of "operational" decisions many of which could be the wrong decisions.

A mention was made that you had initiated a review of the Accounts but no one present (not even the Operational Director with oversight over Barham Park Trust) was able to provide any details as to the scope of that review and who would to conduct it or the timescale. It sounds a Sir Humphrey Appleby type of review. Scrutiny then expressed a  rather forlorn wish that the findings of that mystical review might possibly be reported to them.

I tried to explain the problems to Scrutiny and made a claim that in my view that through bad practices - "operational" decisions - the Barham Park Trust has lost around £100,000 income and therefore that its cash balances  and reserves are understated by at least £100,000. Action is needed to stop the ongoing losses to arise in future years. This is the list:

1. £22,000 architects charges to the Trust. The BPT agreed to undertake the architects study into redevelopment and income generation on the basis that the estimated cost of up to £25,000 would be met by the Council from its Capital program. That is the only decision BPT as an independent endorsed. At the meeting Councillor Tatler, present as one of the Trustees claimed that the Council was advised that the fees could not be paid out of the Councils Capital Fund and "therefore we agreed to charge it to BPT". I think Councillor Tatler forgot the role she was serving - as a Trustee her sole responsibility is to the Trust and NOT to the Council.
 
Irrespective of Cllr Tatler's confusion there is no record of a decision or authority in place from the BPT Trustees to charge £22,000 to the Trust 2022/23 Accounts.
 
2. The largest tenant occupying space in the Barham buildings signed a lease in 2014 at a rent, inclusive of service charges, of £43,000. The rent was due an upward review linked to CPI in 2019. The Property Unit who do not seem to keep a record of when rent reviews are due overlooked this. As a result the increase in rent from 2019 of around £4,800p.a. was not implemented. The loss to BPT between 2019 to 2023 therefore amounts to around £19,000.
 
3. The Children Centre is leased to Brent Council. A Report to the Executive a few years ago reported that the agreed market rent would be £11,000 plus a service charge. No service charges have ever been calculated or charged and definitely not paid. While without a calculation the exact loss is unknown I estimate it at £10,000.
 
4. Service charges have not been charged to other tenants in the complex either - once again the exact figure is unknown but another loss of £10,000 is a reasonable estimate.

5. The Accounts for many years have been showing an insurance cost relating to the Barham Park buildings of £2,500. A large proportion of this cost should have been recharged to the tenants in line with normal lease agreements. Once again as the Councilor Officers supposedly supporting the trust have never calculated the recharge the exact figure is also unknown - but I estimate the loss to BPT as another £10,000 to date.
 
6. For a number of years the Council has used the BPT cash balances of around £500,000 or more within its funds. The Council only pays BPT interest of 2%. Interest for some time.  rates started rising a while back and charities could get a rate above 2%. I estimate that BPT could have achieved an average interest rate at 3% in 2021/22 and  probably as much as 4% in 2022/23 if making independent decisions the loss of interest income would therefore be around £5,000 in 2021/22 and £10,000 in 2022/23 - a total of £15,000 over those two years.
 
7. The rent paid by the Council to BPT for the use of the Children Centre should be based on market rents determined by an independent valuer. This has not been done for some time and the £11,000p.a agreed some 10 years ago is clearly out of date. Even if the market rent had risen in line with CPI it should be around £13,000p.a. by now which means that over the last 5 years BPT has lost around £10,000 in extra rent income.
 
8. Letting of Unit 7. This was agreed in over 4 years and Heads of terms issued in February 2019. Council Officers suspended the process while the long winded review of the buildings etc is carried out. Had the matter been dealt with efficiently the Unit would have been modernised and been serving people with Dementia from at least 1 April 2021. BPT has therefore lost 2 years worth of rent worth £4,000. 
 
9. Unit 7 sustained extensive damage through water penetration and wet rot. Some of the repairs required where suspended while Unit 7 was modernised - the cost of this could have been paid for out of the NCIL Grant awarded to Friends of Barham Library. The work will now need to be carried out at some point by BPT and will cost a minimum of £5,000. (as this is a future cost this is not included in the £10,000 at this point). 
 
10. The charges for use of Barham Park for annual Funfairs are covered by a Council wide agreement negotiated by the Parks Department. This was renewed from 13 January 2022 and covers 5 parks including Barham Park. The daily licence fee  was set at £978.16 per operating day in year 1 plus RPIX as determined by the average for the preceeding period from September and August. This suggests a day fee of over £1,000 per operating day in Barham Park in 2022/23. Paragraph 2.2g then refers to "annual 41 day operational fees etc" to be paid in April with and fees for additional operational dates to be payable in September. 
 
This implies that BPT should have received a payment of 41 x £1,000 = £41,000 in 2022/23. As only £36,000 is shown as received (accounts on cash received basis) there is a shortfall of £5,000. It is possible and probably likely that BPT has been underpaid in many of the previous years too. The Licence to Occupy agreement for the Funfairs is poorly written but irrespective of this a detailed review of this needs to be carried as the Funfair Operator may have been under charged not just for using Barham Park but all the other parks in Brent.
 
11. As you know one of the tenants, brought to the table and espoused as being ideal by Council Officers in 2013 built up rent arrears of a staggering £79,000. The Lease terms state that interest on rent arrears would be charged. While there was an 'amnesty' for this for a while during the Covid lockdowns this came to end a long time ago. Officers responsible for managing BPT failed to impose any interest charges on this substantial debt which will not be settled until 31 March 2024. To cover this up and to ensure that BPT had enough cash to meet its operating needs the Council was forced to make an 'advance' to BPT which is some what secretly reflected in the 2022/23 accounts as the £39,000 figure was netted off against the balance of £12k of architects which was charged to BPT without BPT approval. The loss of interest lost needs to be calculated but could be up to £5,000. 

In conclusion the combination of the above issues suggest a combined loss of around £100,000 to the Trust. I have attended many of the BPT meetings over the years. I have tried to express my concerns but was frequently denied the right to speak. I have reviewed most of the Reports and Minutes of BPT meetings since at least 2013 and cannot find and decisions which authorise the following:

1. The payment of £22,000 Architects Fees
2. The forgoing of Rent Reviews and the charging a rent in line with the mutually agreed Lease Terms.
3. Failure to charge service charges in respect of the Children Centre (and to other tenants)
4. Not recharging insurance costs for many years
5. Not to to pay the market rate of interest on BPT cash balances after interest rates started rising substantially.
6. Not to revalue revalue and pay a proper market rent for the Children Centre
7. to accept the loss of rental income by failing  to complete the letting of Unit 7.
8. Not to charge interest on rent arears.
9. Not to charge correct operational fees for use of Barham Park for Funfairs. In fact the issue of funfair fees and impact of using the land in Barham Park is hardly mentioned.

BPT is a charity and Councillors and Officers have a very special duty of care to a Charity under its control. As Trustees and as responsible Officers the duty is to the charity only. This duty includes a fiduciary duty to ensure that the Charity receives all income that is due to it, that it does not incur expenditure that it is not responsible for and has not authorised and that its assets are protected.

In my view, and the evidence presented above I am concerned that the Trustees and the officers tasked to serve the Charity have not fully met that duty.


Tuesday 26 September 2023

Barham Park Trust accounts rubber stamped despite detailed anaylsis revealing many problems with them

 Paul Lorber was refused permission to present this paper on the Barham Park Trust accounts at today's meeting. The meeting lasted less than 10 minutes. Officers said that representations had been dealt with in previous correspondence and the accounts were fine. Cabinet members in the guise of trustees asked no questions and then rubber stamped them.

 

PAUL LORBER'S PRESENTATION

 

The revised accounts for the year 2022/23 are fundamentally wrong and should not be approved. They are inconsistent with previous years, do not reflect the correct income due to the Charity, overstate the Charity expenses and do not provide information in an understandable and clear way that makes review and scrutiny of those accounts easy.

 

I deal with some of the key issue in detail below and summarise the other issues in need of investigation.

 

Rental Income presentation problem (the income is not confidential and can be easily ascertained from past public reports)

 

Excluding the £11,300 rental income from the Children centre, £6,500 from Virgin Media, casual rentals and income from the funfair the Rental Income due from the four tenants occupying the Barham Park buildings is as follows:

ACAVA                                    £43,000

Friends of Barham Library         £7,000

Barham Veterans Club                £3,000

Tamu Samaj                                 £1,500

TOTAL                                       £54,500

 

This income has remained unchanged for some years. According the Officers the Accounts are presented on a Cash “received” basis rather than on the more usual” arrears” basis.

 

This income is shown in the accounts on the line described as “Rental Income – other”

The amounts shown are:

17/18               £50,373

18/19               £52,500

19/20               £51,500

20/21               £51,500

21/22               £50,009

22/23                 £1,625

 

None of the years 17/18 to 21/22 agree with the expected income suggesting that some rents were not collected. The officers may want to explain which tenant did not pay and why or what the discrepancy with the expected £54,500 p.a. is for each of the years.

 

The amount for the year 2022/23 looks very odd compared to all the previous years. The officers claim that the Accounts for the Trust are prepared on a cash basis (i.e. they show income in terms of cash received and payments in terms of cash paid rather than on the traditional accruals basis of showing the income expected to be received in the year with any amount not received shown in debtors.)

 

This explanation does not stand up to scrutiny when you look at the extracts from the minutes dealing with the 2020/21 accounts. Minute 3.5 clearly states “the majority of the rental income for 2020/21 is still outstanding”. If this is so why is the supposedly “cash received” figure for the year showing £51,500 when most of the rental income “has not yet been paid”.

 

The rental income for 2019/20 of £51,500 too is clearly also NOT the “cash received” as note 3.6 below states that at 31 March 2021 …..£76k of the rental income has not yet been received. As ACAVA’s annual rent is £43,000 this means that £33,000 (£76,000 less £43,000) of the amount outstanding as unpaid must relate to 2019/20 – which in turn means that the £51,500 clearly cannot possibly represent the “cash received” in respect of rent in that year.


Extract from 2020/21 Accounts


3.4 During 2020/21 the Trust incurred expenditure of £96,283 on maintenance of the building complex and the park. This is made up of £60,383 of unrestricted funds expenditure and £35,900 of restricted funds. The Trust generated £81,300 receipts from rental income and interest earned.


3.5 This includes rental income that is due but has not yet been paid. The majority of rental income for 2020/21 is still outstanding. The cumulative rental income due but not paid as at 31 March 2021 was £76,291.


3.6 This means that as at 31 March 2021, the Trust had assets of: (i) £58k unrestricted funds cash (ii) £353k restricted funds cash (iii) £76k rental income due but not yet received (unrestricted funds) (iv) £939k valuation of Barham Park Building Complex


3.7 This means that if the rental income arrears are not received, the Trust would have only £58k of unrestricted cash. If the arrears continue building up, the £58k would be enough to cover around 12 months of maintenance and wardens costs.

 

CONCLUSION

 

The Accounts for all years to 2021/22 have been produced on an accruals basis (they show the rent due and not the cash income received).

 

The revised 2022/23 Accounts presented to you on Tuesday 25 September 2023 are wrong as they are being presented on an inconsistent and a totally incomprehensible basis.

 

The 2022/23 figures are attempting to show some form of ‘cash basis’ whereas the comparative figures for 2021/22 are clearly on the correct accruals basis.

 

Even if officers were correct to present the 2022/23 on a cash received basis to make the accounts consistent and for them to make sense they would have to revise the 2021/22 comparatives to a cash basis too.

 

IT MAKES NO SENSE

 

In terms of the size of its transactions the Barham Park Charity should prepare its accounts on an accruals basis as in relation to rental income the accounts would show the rents due in the year and any amounts uncollected/owing would be shown as a debtor and any rents paid in advance/prepaid would be shown as a creditor.

 

This makes it straight forward to make comparisons between the years in respect of both income and expenditure figures making it easy for Trustees and 3rd party observer to see the trends between years and ask questions if unusual variations arise.

 

OTHER ISSUES

 

Various reports claim that the Council provides the Barham Park Charity with a subsidy. This cannot be substantiated because none of this is reflected in the Barham Park Trust Accounts.

 

Charity Commission Guidance covers this issue:

 

CHARITIES SORP (FRS 102)

 

Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK

 

Accounting for donated facilities and services, including volunteers


6.13. If a charity is given facilities and services for its own use which it would otherwise have purchased, these must be included in the charity’s accounts when received, provided the value of the gift can be measured reliably.


6.14. Measuring donated services using fair value would not be practical as such services cannot be resold and the use of fair value may result in an overstatement of the value of the donation to the charity. Donated facilities and services are therefore measured and included in accounts on the basis of the value of the gift to the charity.


 6.15. Value to the charity is the amount that the charity would pay in the open market for an alternative item that would provide a benefit to the charity equivalent to the donated item. Value to the charity may be lower than, but cannot exceed, the price the charity would pay in the open market for the item. Accounting and Reporting by Charities Page 62


6.16. Donated facilities and services that are consumed immediately must be recognised as income, with an equivalent amount recognised as an expense under the appropriate heading in the statement of financial activities (SoFA).


6.17. Facilities such as office accommodation or services supplied by an individual or an entity as part of their trade or profession can usually be reasonably quantified and must be included in a charity’s accounts.


6.18. Charities often rely on the contribution of unpaid general volunteers in carrying out their activities. However, placing a monetary value on their contribution presents significant difficulties. For example, charities might not employ additional staff were volunteers not available, or volunteers might complement the work of paid staff rather than replace them. These factors, together with the lack of a market comparator price for general volunteers, make it impractical for their contribution to be measured reliably for accounting purposes. Given the absence of a reliable measurement basis, the contribution of general volunteers must not be included as income in charity accounts.


6.19. However, it is important that the user of the accounts understands the nature and scale of the role played by general volunteers. Charities must include a description of the role played by general volunteers and provide an indication of the nature of their contribution in a note to the accounts

 

WHAT DOES THIS MEAN?

 

If substantial – and the Council implies this by always refering to providing the Barham Park Charity with a subsidy – the services provided by the Council to the Charity must be valued and shown both as Donated Income on one side and ‘deemed’ expense on the other.

 

While the net impact is £0 any reader of the accounts become aware of the true cost of managing the Charity.

 

NETTING OFF OF INCOME AND EXPENDITURE?

 

Do the trustees know or understand what the figure described as cash advance” of £27,092 represents?

 

According to the report the £27,092 is actually a net figure made up of the remaining balance of rent owed by one of the tenants of £39k offset by an unpaid consultancy fees of £12k due to the Architects for their recent work on the ‘hypothetical’ project.

 

It is described this way in the Report:


3.11 As at 31 March 2023, the Trust had a rental debtor of £39,625 and a £12,533 payment that was due but not yet paid. These have been recognised as debtors and creditors on the Council’s side and the Council gave a net £27,092 cash advance to the Trust in order to aid the Trust’s cashflow position and avoid a detrimental effect of outstanding debt on the Trust’s financial position. In 2022/23 the cash advance has been reported on a separate line in the income section to aid transparency. The Council has also paid interest to the Trust on the cash advance. The Trust continues liaising with tenants and expects all arrears to be cleared by March 2024.

 

In my view the netting off of these two figures and their presentation is wrong. Income should be shown in the Income section and the Expense in the Expense section. More importantly it hides the fact that £12,533 of consultancy costs on top of the £8,711 already shown in the accounts (Total £21,244) – and there may be more paid and charged in 2023/24 to the Barham Park Charity when they should NOT be.

 

The treatment of the estimated costs of £25,000 for the architects working on the recent Barham Park vision study was agreed and confirmed at the Trust Meeting of 27 January 2022. This is what the minutes say:


Having authorised officers (in September 21) to prepare a financial strategy in respect of the Trust, approval was now being sought to the appointment of an architect in order to lead development of a more holistic options appraisal relating to the feasibility of improvements to the buildings comprising the Estate and impact on current occupation uses and tenancies.  The cost identified for the architectural services required had been £25,000 which it was proposed to fund from the Council’s Capital Programme rather than directly by the Trust, given the existing commitments on its available restricted and unrestricted funds.

 

CLEARLY AN ERROR IN THE 2022/23 ACCOUNTS

 

If it was agreed to charge the Architects cost to the “Council’s Capital Programme” why are £21,244 of the costs charged to the Barham Park Charity in its 2022/23 accounts.

 

The Charity’s surplus for the year and its unrestricted funds are clearly being reduced by this substantial amount.

 

The 2022/23 Accounts are therefore materially wrong on this point alone and need to be corrected.

 

OTHER CUMULATIVE ERRORS IN THESE ACCOUNTS

 

I will just list a few issues here that need investigation, should concern the Trustees and should lead to more questions.

1.      The Barham Park Charity has been deprived of correct Interest Income. The amount paid to it by Brent Council for the use of over £500,000 of cash balances does not represent a fair arms length price. I estimate that in the current year The Charity has been deprived of at least £5,000 of extra income and the amount will be at least double that if this is allowed to continue.

 

2.     The so called ‘arms length’ rent paid by the Council to the Charity for the use of the former Children Centre has not changed for years. As the sub lease has expired a true market rent should be charged each year. The Council has failed to follow correct procedures in ensuring that an ‘arms length rent’ is paid.

 

3.      It is also not clear why the Children Centre is not paying service charges for services such as refuse collection, water etc that it receives. There is no reason why the Charity should be paying for this.

 

4.     There has been a failure to implement rent reviews due some years ago. The cumulative cost of this failure runs into tens of thousands of pounds in lost rental income to the Charity.

 

5.      The Charity has had a benefit of NCIL Grants to upgrade the QE II Silver Jubilee Gardens and the Pond in the Park. The value of these Grant is well in excess of £100,000. The accounts for the current and previous years for failing to reflect both the Grant Income received and the expenditure on which the Grant was spent on.

 

6.     The Accounts fail to show enough detail in relation to the expenditure line of “maintenance and wardens”. This heading includes some expenditures which have nothing to do with maintenance and include items which should be included in the lines – including utilities, waste disposal etc. Without this information the Trustees and others cannot be certain if some of these costs should not have been recharged.

7.      

Why is the Charity incurring an insurance charge of £2,500 – should not some or all of this have been recharged?

 

Conclusion:

 

I have tried to engage with Council officers to highlight these issues. My views and concerns have been ignored. As a result the revised Accounts as presented are fundamentally wrong.

 

1.     They are prepared on the wrong and inconsistent basis.

 

2.     They do not comply with acceptable accounting policies as advised by the Charity commission.

 

3.     The figures are wrong.

 

4.     They understate the Charity’s Income

 

5.     They overstate the Charity’s expenses

 

6.     As a result of 4 & 5 above they understate the net worth of the charity (its net assets).

 

These accounts should NOT be approved or submitted to the Charity Commission in their current state.

 

Councillor Paul Lorber

25 September 2023

 

 

Wednesday 20 September 2023

LETTER: Barham Park new covenant mystery

 

Dear Editor.

 

This is very interesting and odd.

 

On the face of it while I was fighting for a covenant on Barham Park development through the meetings process, the idea was ultimately rejected.

 

So why did the Covenant still end up in the sales documentation?

 

Was it a rogue lawyer who inserted it?

 

Or was it just a cock up that no one noticed (it is normal when drafting a legal document to use a standard pro forma which includes everything under the sun and as part of the process the lawyer strikes out any paragraphs not required or requested).

 

The answer may be important especially if the Council was forced to include it by any of the outsiders?

 

The next meeting of the Trustees Committee to approve the corrected account sis on September 26th.

 

I have written to Debra Norman seeking clarification before the meeting:

 

One key issue outstanding which requires a clear answer is the question as to why the Covenant was put in place.

 

If you review the Barham Park Trust Minutes when the decision to sell the two houses was made you will notice that I argued that a restriction on further development on the site should be out in place. The Trust Committee rejected my proposal.

 

That decision was called in went to Scrutiny. If you check the minutes of that meeting, you will note that I argued the case and that Scrutiny agreed that a restriction should be put in place.

 

The recommendation from Scrutiny then went back to Cabinet but the Scrutiny recommendation was not accepted.

 

On the face of it the proposal for a restriction or covenant was not to be pursued.

 

So how did it come about that such strongly worded restrictive covenant ended up in the sale document relation to 776/778 Harrow Road houses?

 

Approval for the sale was required from the Charity Commission. Did the Charity Commission insist on the restrictive covenant before approving the sale?

 

Did the District Valuer insist on this and approve the valuation on this basis?

 

Was there subsequent advice from the Brent solicitors?

 

Was there a political change if heart because of pressure from within the Labour Party?

 

I would like this to be fully investigated as the reason is crucial to understanding whether the covenant can now be negotiated away or whether there are compelling reasons why it needs to be retained.

 

I would appreciate your answer on this before 26 September.

 

Cllr Paul Lorber