Significant loss to public purse due to unlawful activity and poor governance at community councils

Significant loss to public purse due to unlawful activity and poor governance at community councils
14 October 2021
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Unlawful activity and failure to exercise minimum standards of financial management and governance at Ynysawdre, Llangynwyd Middle and Abertillery and Llanhilleth Community Councils.

The Auditor General for Wales has identified misuses of public money for personal gain in cases where councillors have failed to meet their responsibilities due to poor governance and financial management in his reports in the public interest issued today.

Earlier this week, we issued public interest reports setting out how individual councils found themselves in a difficult position due to poor governance and financial management. In some extreme cases, the lack of proper governance can lead to significant losses to the public purse. Today, we report on 3 such instances.

Our audit identified that both Llangynwyd Middle Community Council and Ynysawdre Community Council failed to adequately monitor financial positions and exercise expected minimum standards of financial management and governance. This failure allowed the former Clerk to both Councils to make illegitimate payments to herself amounting to over £116,000 over a period of 4 years. The councils failed to properly supervise and scrutinise these payments made by their former Clerk.  

Councillors at Abertillery and Llanhilleth Community Council failed to properly scrutinise a gratuity and other payments to its former Clerk leading to a loss of over £27,000. Councillors also failed to ensure they had adequate arrangements in place to secure value for money when buying goods and services. Significant council failings meant that they did not meet legislative requirements in the management of financial affairs and in its duty to implement and maintain effective internal audits.

The reports outline several recommendations to Llangynwyd Middle Community Council and Ynysawdre Community Council which are centred around:

  • Management of key accounting records
  • Review of internal controls
  • Scrutiny and review of delivery of Clerk responsibilities
  • Financial management and governance training
  • Recovery of unlawful payments
  • Appointment of internal auditor

In the case of Abertillery and Llanhilleth Community Council, we recommend that the Council considers whether to seek recovery of the unlawful over-payments referred to in our report.

Inadequate financial management and governance has led to the exploitation of council failings for personal gain by certain individuals and significant loss of public money. These 3 reports show just how important it is to have proper systems, controls and scrutiny in place in order to protect the public purse. I urge all 3 councils to take note of the recommendations we have made.

Auditor General, Adrian Crompton
Ynysawdre Community Council - Inadequate financial management and losses to the public purse
Llangynwyd Middle Community Council - Inadequate financial management and losses to the public purse
Abertillery and Llanhilleth Community Council - Unlawful payments and governance failings