Barham Park Trust Accounts - Two questions that need answering

 I am publishing, with permission, the text of an email sent to Brent's Head of Internal Audit and Investigations:

 

 

Dear Mr Armstrong,

 

 

I am sorry for the short notice, but I have been reading the papers for the Barham Park Trust Committee meeting on Tuesday 5 September at 10am.

 

 

There are a couple of points arising from the Trust accounts for 2022/23 which I believe need to be explained to the Committee and the public at that meeting (even though I will only be able to watch it when the webcast is available to view online later in the week).

 

 

You were the Independent Examiner of those accounts, and at para. 4.2 of your Supplementary Audit Review, you have stated that:

 

 

'No matter has come to my attention, which gives me reasonable cause to believe that, in any material respect, the requirement:

...  To which, in my opinion, attention should be drawn in order to enable a proper understanding of the accounts to be reached.'

 

 

Although I have been accustomed to reading accounts for many years, there are two points with the 2022/23 Barham Park Trust accounts which I think are material for a proper understanding of them:

 

 

1.    Fun Fair Receipts - The 2022/23 accounts show no Fun Fair receipts (previous year £28,172), but the Trustee's Annual Report (6a Appendix 1) states that 'The park hosted a Fun Fair on two occasions.' 

The General Update Report to the September 2022 Trust Committee meeting gave these details: 'Irvin’s Fun Fair were at Barham Park: Operating days between the 20th May to 5th June 2022 (on site 12th May to 6th June); Operating days between the 19th August to 4th September 2022 (and will be on site until a few days later).'

How much was payable by Irvin's Fun Fair for its use of Barham Park for those two periods in 2022/23, and why does this amount not appear in the Trust's 2022/23 accounts?

 

2.    Consultancy Payments - The 2022/23 accounts show Consultancy payments of £21,244 out of the Trust's unrestricted funds. The Officer Report to the Committee on the Trust's Annual Report and Accounts refers to: 'additional one-off costs have been incurred associated with commissioning a Barham Park Feasibility study to consider the use of the Barham Park building and its condition in the long-term.'

It is clear from earlier meetings of the Barham Park Trust Committee, particularly that of 27 January 2022, that the Trust had agreed to appoint Rider Levett Bucknall ("RLB") architects to produce a feasibility study on the future of the Barham Park buildings. It was also clear that it had been agreed the £25,000 cost of this would be met as capital expenditure by Brent Council.

The results of the RLB report are to be considered at the Trust Committee meeting on 5 September, but to understand the 2022/23 accounts properly, more explanation is needed. The meeting on Tuesday should be told, and the answers minuted, on who the £21,244 was paid to, what services were provided to the Trust in return for that payment (and where is the evidence for those services?), who authorised this expenditure and where that authorisation is recorded.

 

 

Thank you, in advance, for your prompt attention to the points I have raised. I am copying this email to other Council Officers who may need to be involved in ensuring that these points are dealt with at Tuesday's meeting. 

 

 

Best wishes,

 

Philip Grant.

 

 

 

 

The Cara Davani Saga - objections to Brent’s 2015/16 Accounts to be investigated

Guest blog by Philip Grant
 

In August 2016, Wembley Matters reported that Cllr. John Warren (as a local elector, not as a councillor) had asked Brent’s Auditor to make a Public Interest report about items of expenditure in the Council’s 2015/16 accounts relating to Cara Davani and the Rosemarie Clarke Employment Tribunal case. LINK  I added a comment to that blog, saying that I had also exercised my right to object to those accounts, and I understand that there were four other Brent electors who objected, with five of the six objections relating to Brent’s £157,610 pay-off in June 2015 to its former HR Director, Cara Davani, and related matters.

I know that a number of interested readers may be wondering “what has happened about this?” Until a few days ago, the answer appeared to be “not very much”, but in the past few days I have received a letter from the Auditor at Messrs KPMG, so can now give you an update. The letter was marked “Private and Confidential”, so I will not attach a copy, but as some of the points are already in the public domain, and others are just an outline of procedure, I am happy that I can share the following information with you.

The Auditor wrote on 14 November to formally accept that my objection of 10 August was validly made under section 27 of the Local Audit and Accountability Act 2014. The letter confirmed that I had set out a case which could give grounds for the Auditor to apply to the Court for a declaration that Brent Council made unlawful payments during 2015/16 in respect of: 

a) A proportion of the total amount paid by the Council in the out-of-court settlement of the Rosemarie Clarke case, which should have been the personal liability of the second respondent in that case, Cara Davani (the Council’s former HR Director). 

b) A proportion of the Council’s legal costs (both external and internal) in the Rosemarie Clarke case which should have been recharged to, and paid by, Cara Davani personally, as a separate respondent in that case. 

c) The whole of the £157,610 “compensation for loss of office” paid to Cara Davani, and shown as part of the Senior Employees’ Remuneration to ‘Human Resources Director (to June 2015)’ at Note 30 to the Council’s draft accounts. 

d) The whole of any amount paid around June 2015 as an “Exit Package” to Andrew Potts, the Council’s former Principal Lawyer (Employment and Education) or similar title, which is included in the amounts for either ‘compulsory redundancies’ or ‘other departures agreed’ at Note 32 to the Council’s draft accounts.

The Auditor also accepted that, if his enquiries led him to the view that these payments were not unlawful, I had validly requested that he should issue a public interest report in relation to matters a) and c) above.

The Auditor’s letter also set out how his firm’s enquiries would proceed, in respect of my objection (and other valid objections) to Brent’s 2015/16 accounts, saying they would now:

■ ask the Council for their response to the objection;

■ ask the Council for documents relevant to the objection;

■ collect the documents that we think will help me make a decision about the objection; 

■ give you and the Council the opportunity to make further comments on the objection;

■ make any further enquiries we consider to be appropriate;

■ if appropriate, tell you and the Council our provisional findings and views; and

■ decide the objection.

The letter concludes by saying:

‘While this marks the start of the formal objection process, we encourage you and the Council to discuss the issues raised to see whether you can come to an agreement. Please also note that you are free to withdraw your objection at any time.’

Readers who have followed this saga will realise that I am unlikely to withdraw my objection without seeing convincing evidence that the payments involved were properly made. I would, however, be willing to discuss these issues with the Chief Executive / Chief Finance Officer of Brent Council, if they are willing to make available (“in confidence”, if necessary) the information and documents needed to ensure that any such discussion could be meaningful.

I am aware that Cllr. Warren has received a similar letter from the Auditor in respect of his objection, but I do not know whether any of the other three local electors who also sent objections to payments made by Brent to, or on behalf of, Cara Davani have also heard from Messrs KPMG. It would make sense if the local residents involved could co-ordinate their dealings with Brent Council (if there are to be discussions). If you are one of those objectors, please contact me (via Martin, if necessary, see email address under “Guest Blogs” in right-hand column), or at least put a comment with your views below. Thank you.

Philip Grant

Gladstone School - enjoy what you're earning

Principal Designate Paul Phillips with 'pupil'

The Gladstone secondary free school has announced on its website,' Owing to unavoidable delays in acquiring a site it is no longer possible to prepare for opening in September 2016.'

This is now becoming a regular announcement woth 120 Year 6 pupils receiving this news every year since 2014.

Meanwhile the school, which has had a Principal Designate since January 2014, has not filed accounts for 2015. The last net assets recorded totalled £93,000.

Since the free school was launched there has been a substantial turnover of directors:

Click to enlarge

The school, motto, 'Enjoy what you're learning',  has still not educated a single child despite having pictures of happy uniformed pupils on its website.

Previous coverage LINK

'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.