The assembly has invested £214m in Communities First since 2001.
Wednesday, 17 March 2010
Heads must roll over Plas Madoc Communities First scandal
Today saw the publication of one of the most damning official reports I have ever seen. It revealed that tens of thousands of pounds meant to be spent by Plas Madoc Communities First on the most deprived community in the borough was diverted to family and friends of senior officers.
Here are the detailed findings of the Wales Audit Office team:
DETAILED FINDINGS
Payments to Family Members
22. Our investigation revealed a number of payments to non-PMCF staff members. We sought
clarification of who these people are and many are related to the Coordinator. We are aware that
several of the Coordinator’s family members receive payments from PMCF for services provided,
with one being directly employed. The details of these costs are:
• Brother 1 received a mobile phone from PMCF, incurring costs of £1,460, the details of which are
outlined below in para. 28. We found no evidence that he provides any services to PMCF or any
reason why he should be in possession of this phone and be able to incur charges which are then
paid by the partnership.
• Brother 2 receives payments from PMCF to maintain the PMCF caravan sited in Rhyl. The details
of the caravan are outlined in para 56. Furthermore, this individual has a PMCF mobile phone
(para 28). We are aware that Brother 2 has undertaken some work for PMCF, primarily through
his involvement with the Plas Madoc’s Got Talent event for which he received a payment of
£2,000 in 2008 (jointly with his partner as outlined below). We are not aware of any other services
he has provided to PMCF, although we do know that he travelled to the Gambia as part of
PMCF’s Gunjur project. Discussions with staff within PMCF have shown it is unclear what Brother
2’s role was in respect of the Gunjur Project. The Coordinator stated that Brother 2 had fully
repaid the cost of the trip to PMCF, although our testing and discussions with the Finance
Manager showed no evidence of this.
• Brother 3 provides Brazilian Ju Jitsu training. Since March 2006 he has received £40,615 for the
delivery of this training. The invoices submitted for Ju Jitsu training also contain an element for
petrol/wear and tear of his vehicle, however our findings showed that he is also claiming fuel
through PMCF’s account with a local fuel supplier (Para 38).
• Brother 2’s partner is an actress and has been delivering drama classes within PMCF since
December 2006. During this period she has received £22,000 for the delivery of the classes.
She has also been paid for her appearance at Plas Madoc’s Got Talent (£499.00 in 2007 and
£2,000 in 2008, although the 2008 payment was for her and Brother 2’s appearance). Brother 2’s
partner has also been claiming fuel both through the Arval fuel card and the local fuel supplier
account as outlined in para 35. We also noted that during the same period that she was receiving
payment for delivery of the drama classes, another organisation was also providing drama
lessons within PMCF. This was explained by the Coordinator as one of the classes having a
greater focus on certain aspects of drama.
• The Coordinator’s Husband has also received a payment of £319.00 for comparing and singing at
two PMCF events. This is despite the Coordinator claiming both at interview and to the Board
that her Husband received no payment for his services. It was suggested that the payment
reflected the availability of the husband’s broadcasting equipment during the events. The
Coordinator’s Husband also had a PMCF mobile phone (para 28).
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23. We sought explanations for the appointment of the Coordinator’s family members and were informed
by the Coordinator that Brother 3 was the best possible supplier of Brazilian Ju Jitsu as he was
European Champion and no one else in the area would be able to supply these services. This sport,
in the view of the Coordinator, is more concerned with self control which was of benefit to the
attendees from the local community. Similarly by using Brother 2’s partner, a well known actress to
deliver drama classes it encouraged and inspired more young people to participate.
24. Whilst we accept that these individuals have delivered services to PMCF, we consider that the
payments made have been excessive. Also during the course of our review it became apparent that
the Board were not initially aware of the use of the Coordinator’s family members and they certainly
did not approve such appointments. Instead, Board Members became aware at a later stage of the
relationship between the individuals and the Coordinator. More significantly, the Board was
completely unsighted on the level of payments being made to the Coordinator’s family members.
25. Both of the Finance Officer’s daughters are employed by PMCF, enjoying considerable benefits in
kind such as driving lessons and the use of mobile phones (including call charges) as detailed in
para 30.
26. We are also aware that:
• Brother 3’s partner works within PMCF.
• The Chair’s son has worked for and received payment from PMCF.
• The Coordinator’s Personal Assistant and Company Secretary’s father is a Board Member.
• A Board Member’s wife is employed as a Play/Early Years Participation Officer by the partnership.
The same Board Member is also employed by PMCF.
• The Caretaker is married to a trainer who provided large numbers of courses to the partnership.
27. Whilst it is accepted that in small communities, friends and relatives are often employed by the same
organisation, it is of vital importance that there is transparency and openness when such
appointments are made. In the case of PMCF it is evident that the use of family members by the
Coordinator has not been fully disclosed to the Board and in particular the level of payments and
benefits which have been received by the individuals concerned.
Mobile Phones
28. Our review of invoices showed that a significant amount of expenditure has been incurred on mobile
phone bills by PMCF. Further testing of this area revealed that there was evidence of mobile phones
being allocated to non-PMCF staff. The following costs had been incurred by the Coordinator’s
family members:
• Husband - £800 (Feb 2008 – Sept 2009).
• Brother 1 - £1,460 (April 2007 – Sept 2009) - Av £50 pm.
• Brother 2 - £530. (Dec 2008 – Sept 2009).
Plas Madoc Communities First
Plas Madoc Communities First 19
29. This was queried with the Coordinator who admitted that she had given the phones to her family
members as handsets had been offered “free” by the phone companies. We indicated that whilst the
handset was free there was a cost incurred with line rental/calls. The Coordinator stated that PMCF
was given bundles of free minutes and with one exception she had not been made aware that any
other cost has been incurred. She did admit that on one occasion the Finance Officer had raised the
issue of Brother 2’s phone costs and she had asked that this phone be blocked. Our testing showed
that this phone had not been blocked. When discussing phone costs with the Finance Officer he
stated that he was aware that mobile phones had been allocated to the Coordinator’s family but as
she was his line manager he didn’t feel able to query it. He also stated that she had never
requested, nor had he provided, any information on phone costs. The Board Members were
unaware that non-PMCF staff had mobile phones.
30. Further testing of mobile phones held by PMCF staff demonstrated that considerable costs had been
incurred as outlined below:
• Staff member 1 – £3,611 (April 2008 – Oct 2009) - £116 pm.
• Staff member 2 - £3,202 (April 2008 – Oct 2009).
• Coordinator - £2,631 (April 2008 – Oct 2009) - £80pm.
• Finance Officer – £524 (Annual cost).
It should be noted that all mobile phones costs incurred within PMCF were reviewed and the ones
outlined above are the only ones considered excessive.
Staff member 1 and 2 are the Finance Officer’s daughters, who are both employed by PMCF.
31. The level of mobile phone bills was discussed with the Finance Officer. He stated that he was aware
that the costs were high but considered it to be a “perk of the job”. Similarly it was queried why
individuals who were office based, required a mobile phone. Again it was stated that this was a
“perk”. The Coordinator appeared unsighted on the high level of mobile phone costs and said that in
the past she had blocked phones when charges appeared high and could not be explained by
individuals. The Coordinator does not receive any information on the level of costs incurred by
PMCF on mobile phones. Similarly the Board were unsighted on the level of mobile phone charges.
Fuel/Petrol/Diesel
32. PMCF has three different methods for incurring expenditure on fuel (e.g. petrol and diesel).
• Staff can reclaim any amounts spent through Plas Madoc’s travel and subsistence systems;
• There are fuel “credit cards” used (Arval), which can be handed over at any garage to pay for fuel;
and
• There is an account set up with a local fuel supplier.
33. Our testing showed that staff used all three methods to obtain fuel; however there are no formal
procedures in place to outline how these systems should operate.
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34. Furthermore, our findings showed that there is no reconciliation to ensure that staff reclaiming money
through the T&S system are not also claiming through the local fuel supplier or using a fuel credit
card. We undertook testing in this area and found no evidence of staff “double claiming,” but it
should be noted that due to the lack of controls over the three mechanisms for claiming fuel we
cannot provide assurance that double claiming has not occurred.
35. Our testing showed that since April 2008 £6,102.14 has been incurred on Arval cards. The vast
amount of expenditure (£4,129.52) has been incurred by the Arval card held by the Coordinator.
Further review showed that the majority of the expenditure was incurred in the Manchester/Bolton
area by a vehicle owned by the Coordinator’s Brother 2’s partner. The Coordinator explained that
she had given her brother 2’s partner the card, to obtain fuel as she was delivering drama classes to
PMCF. This was despite our findings showing that an element of fuel had been included on the
invoices for drama lessons.
36. The Finance Officer also had a fuel card which had incurred costs of £1,300. This was put to the
Finance Officer who claimed that this was a “perk of the job.”
37. Our findings also showed that two PMCF company vehicles have also used a card for legitimate
business purposes.
38. It was very difficult to audit the invoices received from the local fuel supplier as the invoices includes
a statement showing a list of signatures of people who have signed for fuel which is difficult to
decipher. Since April 2006 £25,198 has been spent at the local fuel supplier and we were able to
determine that considerable amounts were being purchased by the Coordinator’s family. These
included
• Brother 3 - £1,633.98. This individual also claimed fuel costs through his invoices to PMCF.
• Husband - £1,365.19. All sorts of vehicles but mostly PMCF vehicles.
• Brother 2 and/or partner = £513.
39. Upon querying this with the Coordinator she stated that Brother 3 claimed fuel as he travelled in
excess of the amounts contained on his invoices. (The same explanation was offered for Brother 2
and partner).
40. We also queried with the Coordinator why the invoices were paid when they contained “blanks”
where people had taken fuel but had not signed for it. She said that she didn’t have sight of any of
the payments made for fuel and was not sure why this would have occurred. The Finance Officer
offered no explanation for this and the Board were unsighted on fuel costs.
41. During our site visit we were also informed by the Finance Manager that staff use the fuel card or the
account with the local fuel supplier to obtain fuel for personal use. We were told that everyone does
this and it is considered a “perk” of the job. The Coordinator disputes that this takes place and
assured us that staff are aware that they should not obtain fuel for personal use. As there is no
process or evidence of management review to confirm that the fuel costs incurred are only for official
business we can gain no assurance over this area.
Plas Madoc Communities First
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Payroll
42. Prior to the transfer of the payroll function to AVOW, PMCF operated both a weekly and monthly
payroll for staff. Those on the weekly payroll submitted timesheets which were then processed by
the Finance Officer and those on the monthly payroll were paid a standard monthly sum.
43. Our findings showed that there was a complete absence of segregation of duties with regard to the
operation of the payroll with the Finance Officer having sole responsibility for administering and
managing the payroll.
44. Of more significant concern was our testing of the weekly payroll system which showed that the
Finance Officer paid staff even though the majority of timesheets were not authorised. Furthermore,
he processed and paid his own daughter’s timesheets. We also obtained evidence that he created
timesheets on behalf of his daughter or paid her without any timesheet. At interview he confirmed
that this had happened and stated the reason he paid other staff who had submitted unauthorised
timesheets was that people relied on the money and there was only a short window of opportunity for
processing the timesheets.
45. The Finance Officer by authorising his own daughter’s timesheets, has exposed himself to criticism
particularly as we are aware that he has created timesheets on behalf of his daughter before
processing and paying her wages. This represents a fundamental failure in the existence of
segregation of duties and exposes the organisation to significant criticism of nepotism and
preferential treatment.
46. We also found there was no clear and transparent audit trail demonstrating the hourly rates which
were applicable to staff. A review of timesheets and the corresponding payroll showed that various
rates were applied to various members of staff. Whilst we accept that staff are paid different rates for
different posts and at different times of the day, we consider that there should be far greater
transparency in the rates which are used.
47. We were informed that they use JNC pay scales for weekly and monthly paid staff although PMCF
pays above the average for the sector, as this encourages commitment and retention of staff.
48. We also found evidence of one member of staff being paid twice by submitting two timesheets which
indicated that she had been undertaking two jobs at the same time. This had not been detected by
any management checks.
49. It was also of concern to note that volunteers are paid an hourly rate. Our understanding is that
volunteers should only be paid sums to cover their expenses rather than a waged amount.
50. Our findings showed that the Chair of the Board’s Son has worked intermittently for PMCF. It was a
concern to note that he appeared to buy a laptop and software, for which he was then reimbursed
through payroll. He left PMCF shortly afterwards and we could find no evidence that the laptop was
returned.
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Child Support Agency Issues
51. During our visit we ascertained that the Finance Officer’s salary is paid part through the payroll and
then he invoices PMCF for the balancing amount via his own Company. When querying the
reasoning behind this, we were informed by the Finance Officer that he had done this to artificially
deflate his salary figures for Child Support Agency (CSA) assessment purposes. Furthermore, our
testing showed that since April 2008 £3046.41 worth of payments had been made directly to the CSA
from PMCF. We were informed by the Finance Officer that they related to his own CSA liability and
he was intending to repay the amounts back to PMCF in the future. He stated that some repayment
had already occurred. Our testing showed that £1,989.20 had been recovered from the Finance
Officer’s salary, leaving a shortfall £1,057.21. The Finance Officer stated that he was aware of the
shortfall and the CSA were re-assessing his payment levels and he was confident that this would
resolve the issue.
52. The Coordinator stated that she was aware of the new payment/payroll arrangements for the Finance
Officer’s salary however she was not aware of the issues regarding the CSA payments. IAS are
progressing this matter with the CSA, particularly in view of the apparent measures taken to
artificially deflate the salary figures.
Loans to staff
53. Our audit testing showed that staff within PMCF had been provided with interest-free loans from
PMCF, which were approved by the Coordinator. Whilst a schedule was maintained outlining who
owed loans and the repayments that had been made, there was no formal policy or agreement as to
how the lending of money to staff should be managed and administered. We saw evidence of loans
being repaid through the payroll although it was evident that some members of staff had not repaid
the amount owed and had left PMCF. The Finance Officer admitted that there were outstanding
debts which were unlikely to ever be recovered. We are unable to quantify the full amount of debt
outstanding due to the nominal amounts of money which are sometimes loaned to staff through petty
cash; however we believe the overall sum to be less than £2,000.
54. We asked the Coordinator what the purpose of these loans was and she said that loans were given,
with her agreement, to staff who were in need of them for various reasons. For example the
Coordinator had taken one of her loans from PMCF to pay for a holiday. The Coordinator stated that
she was unaware that some individuals had not repaid loans, as she undertook no review of the
loans process.
55. The provision of loans to staff, particularly when there is no formal policy, does not represent good
financial practice and moreover exposes PMCF to considerable criticism if the “loan scheme” is not
made available to all employees.
Plas Madoc Communities First
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Caravan
56. PMCF has use of a caravan sited at Rhyl, which is rented out to residents of Plas Madoc to provide
an opportunity to the less fortunate members of the community to have a holiday. Our findings
showed that there is some uncertainty over who owns the caravan; although we found evidence that
a site fee and hire fee are paid annually by PMCF for the apparent rent of an eight berth caravan.
The Coordinator claims that the caravan is owned by PMCF, whilst the Finance Officer originally
asserted that the caravan was rented from the Coordinator’s brother. However, during the latter
stages of our investigation he stated that it appeared that PMCF owned the caravan and the
payments made to the Coordinator’s brother were to maintain the caravan.
57. Our findings showed that a £6,000 fee was paid to the Coordinator’s brother on an annual basis for
the caravan’s maintenance, although we found further evidence that repairs and the maintenance
costs were funded via petty cash, so we are unsure what the £6,000 payment was for. The payment
was made part cash and part cheque. It was observed that the site fees to the caravan park (of
around £2,800) were paid some two months in advance of the payment being made for the hire of
the caravan itself.
58. Whilst there is no direct risk to PMCF of paying cash to a supplier, this does not represent good
practice as cash payment may be requested by suppliers in order to avoid income tax liabilities
and/or VAT.
59. Of more significant concern were our findings relating to the banking of the income generated by the
caravan. Our testing showed that only £60 had ever been banked, although an analysis of the
caravan booking records showed that the following amounts had been receipted through letting the
caravan:
• 2007 - £1735
• 2008 - £1980
• 2009 - £1415
60. This issue was discussed with the PMCF Coordinator who informed us that the member of staff who
had been responsible for receipting the caravan takings during 2009 had been found to be stealing
the money. The member of staff involved was a resident who had been offered support by PMCF
through the opportunity of employment in order to provide her with a more stable lifestyle. The
individual had also received a loan from PMCF of £660; we believe this was to settle rent arrears
and the PMCF loan remains outstanding. The individual concerned had been dismissed the week
prior to our site visit; however the Coordinator stated that the Police had not been contacted as it
was considered to be detrimental to the continued rehabilitation of the individual concerned.
61. We asked both the Coordinator and the Finance Manager for an explanation of what had happened
to the caravan letting monies in previous years and were informed by the Coordinator that the
caravan money was used as an extension of the petty cash when it was needed. For example,
nominal amounts of money (£10-15) were given to residents if they were in financial difficulties and
were awaiting benefits.
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62. We also asked the Finance Officer what his role was in the operation of the caravan lettings and he
was adamant that he had no involvement in any aspect of the caravan hire, lettings or banking of
monies.
63. It should also be noted that during our visit we reviewed the caravan income cash box, which was
held in the PMCF safe and found it to be empty.
64. We have significant concerns over the entire operation of the caravan scheme and would
recommend that with immediate effect there are robust processes put in place to manage the
caravan-letting process. In particular, all income generated by the caravan should be promptly
banked and accounted for in PMCF’s finance system. PMCF are currently in the process of
establishing who has ownership of the caravan.
Petty Cash
65. We have fundamental concerns over the petty cash system in operation within PMCF. Large items
of expenditure are purchased through petty cash including a car that had been purchased for £2,500.
The car had been bought from a relative of the Finance Officer.
66. Furthermore, we found boxes of receipts which had been processed through petty cash but had not
been accounted for, and contained no explanation of why the expenditure had been incurred. We
are aware that the Treasurer had raised concerns over the level of pretty cash used by PMCF with
the Coordinator but no action was ever taken.
67. We also found evidence of receipts attached to petty cash vouchers being less than the amount
provided through petty cash. We were unable to obtain any explanation for this from the Finance
Officer.
68. Our findings also showed that petty cash payments were made to the Coordinator to reimburse her
for items she claimed to have bought even though no receipts were provided.
69. Good practice suggests that petty cash should only be used for items of minor business expenditure
and normally organisations set a financial limit on the value of items paid for through the petty cash
system (often around £50). It was evident from our limited testing that a significant amount of
transactions were processed through petty cash. This represents a significant risk for the following
reasons:
• normal payment authorisation procedures may be bypassed;
• duplicate payments may be made;
• petty cash could be used for the cashing of personal cheques; and
• petty cash may be stolen.
Plas Madoc Communities First
Plas Madoc Communities First 25
Other financial concerns
70. Our testing showed that invoices do not demonstrate that goods/services have been receipted (or by
whom). The Finance Officer stated that budget holders had responsibility for ordering what ever they
wanted as long as the budget exists. Similarly the Coordinator stated that as long as there was a
budget which was not exceeded, she didn’t undertake any review to ascertain what the funds had
been spent on or if value for money had been achieved.
71. We found evidence of several payments being made to the same supplier on the same day. Upon
querying this we were told that payments are split to fall under the bank mandate requirements so
that the Treasurer’s signature is not required. (Any cheque payment above £500 requires Board
approval).
72. During our review of cheque book stubs we also found blank cheque book stubs not completed. We
were unable to establish why this had occurred. The Finance Officer stated that the Treasurer had
been asked to sign blank cheque so that PMCF would be able to pay large sums in the event he was
away and not able to act as a counter signatory. However, the Treasurer asserted that he would
never sign any cheque without a corresponding invoice and he had certainly not been asked to sign
blank cheques prior to receipt of an invoice. It should also be noted that we found no evidence of
any of these cheques being presented at the bank.
73. The actions in paras 71 and 72 are concerning, particularly as the Treasurer visits PMCF almost
every day so therefore is regularly available to sign any cheques (or other documentation).
74. We also found poor accounting procedures in respect of income-generating activities. PMCF hold
events which generate income; however, the income is never quantified, accounted for and often is
not banked. Instead we were informed that this income is used to supplement petty cash and is
used for expenditure on other items within PMCF. We are therefore unable to determine how much
income is generated from these activities or more importantly what happen to the receipted monies.
75. We have already outlined our concerns over the lack of financial information received by PMCF’s
Board and in particular the lack of awareness Board Members had in respect of the annual
Management Letters produced by PMCF’s appointed auditors. We are aware that the Board have
requested more “user friendly” financial information from the Finance Officer, although this has not
been forthcoming. It appears that the relationship with the PMCF auditors was managed by the
Finance Officer and the Chair informed us at our end of audit fieldwork meeting, that he had been
contacted by the partner responsible for the PMCF audit who had informed him, that on an annual
basis the auditors offered to attend the AGM to present the accounts and audit report, as is normal
practice. The Finance Officer had apparently declined the offer on several occasions stating that he
was able to present the information to the Board himself. Subsequently the Finance Officer was
unavailable to attend the Board meeting; this happened on several occasions.
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Construction Work
76. Some of the original allegations claimed that construction works undertaken on the Coordinator’s
house were paid for by PMCF. Prior to our initial site visit we received specific evidence in respect of
this matter. However, we have not been able to corroborate any of these claims primarily because
PMCF’s Peris Road premises was being re-developed at the same time as the construction works on
the Coordinator’s own property, so we have no way of knowing whether the invoices paid through
PMCF’s finance system were for valid Peris Road works or for materials which were subsequently
used elsewhere. Furthermore, the invoices and delivery notes show no evidence of where the good
and services were to be delivered. The Coordinator states that these allegations are without
foundation. We are unable to substantiate any of the claims in this area.
Payments to Board Members
77. We saw evidence of a payment of £10,000 in respect of play area project management fees for one
Board Member who is also a Plasterer by trade. (His wife also works for PMCF as the PMCF
Play/Early Years Participation Officer). We saw no evidence that these services were procured
through open competition or the exact specification/purpose of these services. The Coordinator
stated that they had used this individual as he was a local man who had previously done work.
However, it appears that there was never any disclosure to the Board that work had been awarded to
a Board Member.
78. This Board Member also received payment for the “Get out and Play Scheme” and submitted weekly
timesheets to claim payment.
Driving Lessons
79. We found evidence that since March 2008 £3,080 has been spent on driving lessons for staff and not
for the community. The Finance Officer stated that this was a perk although he did indicate that he
believed this was eligible Communities First expenditure. We later established that this is not eligible
Communities First expenditure.
Mediafields
80. Our findings showed that there is a significant amount of expenditure made to a company called
Mediafields for IT hardware, software and support services. In addition there is also significant other
IT expenditure made through outlets such as Staples and through petty cash. We were informed that
when PMCF were initially set up Mediafields were recommended by AVOW as they offered an
excellent service and good value for money. Considering the level of payments to Mediafields, we
would suggest that PMCF need to test the market and obtain quotes to ensure that Mediafields
continues to offer the best value for money.
Plas Madoc Communities First
Plas Madoc Communities First 27
Asset Register
81. Our testing showed that the asset register is not complete or up to date. It is very difficult to
ascertain how many assets are within PMCF or their location. For example, we have been unable to
determine exactly how many laptops are currently in operation within PMCF. This was queried with
the Finance Officer who admitted that a number of laptops had gone missing and the asset register
was not up to date. Furthermore, he stated he leaves the asset register until the year end for the
Auditors to do as “he had been lazy”.
Other unusual items
Parking Fines
82. Our testing showed that parking fines incurred by PMCF staff had been paid for by PMCF. We
queried this practice with the Coordinator who could offer no explanation, even though her own fines
had been paid for by PMCF. The Finance Officer stated that he paid the fines as he was told to do
so by the Coordinator.
Accommodation Costs
83. We also identified that PMCF staff often attend courses and conferences. Our testing showed that
expensive hotel rooms are often booked, particularly in the case of the Coordinator. In one case the
Finance Officer had attended a digital photography course which was held over a weekend in
London; his partner also stayed at the hotel which was paid for by PMCF at a cost of £330. During a
period of bad weather, a local hotel was booked for the Coordinator to enable her to easily access
her place of work. The cost of this was £713.70. The Coordinator claims that the Board approved
this expenditure. Upon discussion of this issue with the Chair, he stated that whilst he had been
aware that the Coordinator had chosen to stay locally during a spell of bad weather, he certainly was
not aware that PMCF had paid for the accommodation.
Gifts to staff
84. We also found evidence that gifts are bought for staff for various occasions (birthdays, wedding etc)
through petty cash. On most occasions the petty cash is refunded through staff contributions but we
are unsure why PMCF monies are used for this purpose. We could obtain no explanation for this.
Christmas Party
85. Evidence was found of an invoice for the 2008 Christmas party totalling £2667.30. This party was for
staff within PMCF and there was evidence that many of the staff attending the event had contributed
to the cost via salary deductions, but not all staff made a contribution.
86. Furthermore, no contributions had been obtained from staff for Christmas parties held in previous
years, which were held in Manchester and therefore also incurred an overnight stay.
The report also found there was no real oversight from either WAG or the Plas Madoc Communities First board, who were responsible for the limited company. Despite receiving more than £3.5m of public money over seven years, it appears the board members - who include the local councillor Paul Blackwell as well as other prominent members of the community - did little to ensure that money was spent properly.
At a time when public money is tight and getting tighter, misusing it on such a scale is a scandal. The involvement of the police appears inevitable but who will now police those who were meant to guard the public purse? The current board of Plas Madoc Communities First must be replaced and the community must take ownership of this failing flagship so they decide how and where the remaining money is spent for the good of that community.
UPDATE: The report makes reference to a whistleblower. Without her coming forward and putting up with threats, innuendo and abuse from a range of people and organisations this report would never have been written.
Here are the detailed findings of the Wales Audit Office team:
DETAILED FINDINGS
Payments to Family Members
22. Our investigation revealed a number of payments to non-PMCF staff members. We sought
clarification of who these people are and many are related to the Coordinator. We are aware that
several of the Coordinator’s family members receive payments from PMCF for services provided,
with one being directly employed. The details of these costs are:
• Brother 1 received a mobile phone from PMCF, incurring costs of £1,460, the details of which are
outlined below in para. 28. We found no evidence that he provides any services to PMCF or any
reason why he should be in possession of this phone and be able to incur charges which are then
paid by the partnership.
• Brother 2 receives payments from PMCF to maintain the PMCF caravan sited in Rhyl. The details
of the caravan are outlined in para 56. Furthermore, this individual has a PMCF mobile phone
(para 28). We are aware that Brother 2 has undertaken some work for PMCF, primarily through
his involvement with the Plas Madoc’s Got Talent event for which he received a payment of
£2,000 in 2008 (jointly with his partner as outlined below). We are not aware of any other services
he has provided to PMCF, although we do know that he travelled to the Gambia as part of
PMCF’s Gunjur project. Discussions with staff within PMCF have shown it is unclear what Brother
2’s role was in respect of the Gunjur Project. The Coordinator stated that Brother 2 had fully
repaid the cost of the trip to PMCF, although our testing and discussions with the Finance
Manager showed no evidence of this.
• Brother 3 provides Brazilian Ju Jitsu training. Since March 2006 he has received £40,615 for the
delivery of this training. The invoices submitted for Ju Jitsu training also contain an element for
petrol/wear and tear of his vehicle, however our findings showed that he is also claiming fuel
through PMCF’s account with a local fuel supplier (Para 38).
• Brother 2’s partner is an actress and has been delivering drama classes within PMCF since
December 2006. During this period she has received £22,000 for the delivery of the classes.
She has also been paid for her appearance at Plas Madoc’s Got Talent (£499.00 in 2007 and
£2,000 in 2008, although the 2008 payment was for her and Brother 2’s appearance). Brother 2’s
partner has also been claiming fuel both through the Arval fuel card and the local fuel supplier
account as outlined in para 35. We also noted that during the same period that she was receiving
payment for delivery of the drama classes, another organisation was also providing drama
lessons within PMCF. This was explained by the Coordinator as one of the classes having a
greater focus on certain aspects of drama.
• The Coordinator’s Husband has also received a payment of £319.00 for comparing and singing at
two PMCF events. This is despite the Coordinator claiming both at interview and to the Board
that her Husband received no payment for his services. It was suggested that the payment
reflected the availability of the husband’s broadcasting equipment during the events. The
Coordinator’s Husband also had a PMCF mobile phone (para 28).
18
23. We sought explanations for the appointment of the Coordinator’s family members and were informed
by the Coordinator that Brother 3 was the best possible supplier of Brazilian Ju Jitsu as he was
European Champion and no one else in the area would be able to supply these services. This sport,
in the view of the Coordinator, is more concerned with self control which was of benefit to the
attendees from the local community. Similarly by using Brother 2’s partner, a well known actress to
deliver drama classes it encouraged and inspired more young people to participate.
24. Whilst we accept that these individuals have delivered services to PMCF, we consider that the
payments made have been excessive. Also during the course of our review it became apparent that
the Board were not initially aware of the use of the Coordinator’s family members and they certainly
did not approve such appointments. Instead, Board Members became aware at a later stage of the
relationship between the individuals and the Coordinator. More significantly, the Board was
completely unsighted on the level of payments being made to the Coordinator’s family members.
25. Both of the Finance Officer’s daughters are employed by PMCF, enjoying considerable benefits in
kind such as driving lessons and the use of mobile phones (including call charges) as detailed in
para 30.
26. We are also aware that:
• Brother 3’s partner works within PMCF.
• The Chair’s son has worked for and received payment from PMCF.
• The Coordinator’s Personal Assistant and Company Secretary’s father is a Board Member.
• A Board Member’s wife is employed as a Play/Early Years Participation Officer by the partnership.
The same Board Member is also employed by PMCF.
• The Caretaker is married to a trainer who provided large numbers of courses to the partnership.
27. Whilst it is accepted that in small communities, friends and relatives are often employed by the same
organisation, it is of vital importance that there is transparency and openness when such
appointments are made. In the case of PMCF it is evident that the use of family members by the
Coordinator has not been fully disclosed to the Board and in particular the level of payments and
benefits which have been received by the individuals concerned.
Mobile Phones
28. Our review of invoices showed that a significant amount of expenditure has been incurred on mobile
phone bills by PMCF. Further testing of this area revealed that there was evidence of mobile phones
being allocated to non-PMCF staff. The following costs had been incurred by the Coordinator’s
family members:
• Husband - £800 (Feb 2008 – Sept 2009).
• Brother 1 - £1,460 (April 2007 – Sept 2009) - Av £50 pm.
• Brother 2 - £530. (Dec 2008 – Sept 2009).
Plas Madoc Communities First
Plas Madoc Communities First 19
29. This was queried with the Coordinator who admitted that she had given the phones to her family
members as handsets had been offered “free” by the phone companies. We indicated that whilst the
handset was free there was a cost incurred with line rental/calls. The Coordinator stated that PMCF
was given bundles of free minutes and with one exception she had not been made aware that any
other cost has been incurred. She did admit that on one occasion the Finance Officer had raised the
issue of Brother 2’s phone costs and she had asked that this phone be blocked. Our testing showed
that this phone had not been blocked. When discussing phone costs with the Finance Officer he
stated that he was aware that mobile phones had been allocated to the Coordinator’s family but as
she was his line manager he didn’t feel able to query it. He also stated that she had never
requested, nor had he provided, any information on phone costs. The Board Members were
unaware that non-PMCF staff had mobile phones.
30. Further testing of mobile phones held by PMCF staff demonstrated that considerable costs had been
incurred as outlined below:
• Staff member 1 – £3,611 (April 2008 – Oct 2009) - £116 pm.
• Staff member 2 - £3,202 (April 2008 – Oct 2009).
• Coordinator - £2,631 (April 2008 – Oct 2009) - £80pm.
• Finance Officer – £524 (Annual cost).
It should be noted that all mobile phones costs incurred within PMCF were reviewed and the ones
outlined above are the only ones considered excessive.
Staff member 1 and 2 are the Finance Officer’s daughters, who are both employed by PMCF.
31. The level of mobile phone bills was discussed with the Finance Officer. He stated that he was aware
that the costs were high but considered it to be a “perk of the job”. Similarly it was queried why
individuals who were office based, required a mobile phone. Again it was stated that this was a
“perk”. The Coordinator appeared unsighted on the high level of mobile phone costs and said that in
the past she had blocked phones when charges appeared high and could not be explained by
individuals. The Coordinator does not receive any information on the level of costs incurred by
PMCF on mobile phones. Similarly the Board were unsighted on the level of mobile phone charges.
Fuel/Petrol/Diesel
32. PMCF has three different methods for incurring expenditure on fuel (e.g. petrol and diesel).
• Staff can reclaim any amounts spent through Plas Madoc’s travel and subsistence systems;
• There are fuel “credit cards” used (Arval), which can be handed over at any garage to pay for fuel;
and
• There is an account set up with a local fuel supplier.
33. Our testing showed that staff used all three methods to obtain fuel; however there are no formal
procedures in place to outline how these systems should operate.
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34. Furthermore, our findings showed that there is no reconciliation to ensure that staff reclaiming money
through the T&S system are not also claiming through the local fuel supplier or using a fuel credit
card. We undertook testing in this area and found no evidence of staff “double claiming,” but it
should be noted that due to the lack of controls over the three mechanisms for claiming fuel we
cannot provide assurance that double claiming has not occurred.
35. Our testing showed that since April 2008 £6,102.14 has been incurred on Arval cards. The vast
amount of expenditure (£4,129.52) has been incurred by the Arval card held by the Coordinator.
Further review showed that the majority of the expenditure was incurred in the Manchester/Bolton
area by a vehicle owned by the Coordinator’s Brother 2’s partner. The Coordinator explained that
she had given her brother 2’s partner the card, to obtain fuel as she was delivering drama classes to
PMCF. This was despite our findings showing that an element of fuel had been included on the
invoices for drama lessons.
36. The Finance Officer also had a fuel card which had incurred costs of £1,300. This was put to the
Finance Officer who claimed that this was a “perk of the job.”
37. Our findings also showed that two PMCF company vehicles have also used a card for legitimate
business purposes.
38. It was very difficult to audit the invoices received from the local fuel supplier as the invoices includes
a statement showing a list of signatures of people who have signed for fuel which is difficult to
decipher. Since April 2006 £25,198 has been spent at the local fuel supplier and we were able to
determine that considerable amounts were being purchased by the Coordinator’s family. These
included
• Brother 3 - £1,633.98. This individual also claimed fuel costs through his invoices to PMCF.
• Husband - £1,365.19. All sorts of vehicles but mostly PMCF vehicles.
• Brother 2 and/or partner = £513.
39. Upon querying this with the Coordinator she stated that Brother 3 claimed fuel as he travelled in
excess of the amounts contained on his invoices. (The same explanation was offered for Brother 2
and partner).
40. We also queried with the Coordinator why the invoices were paid when they contained “blanks”
where people had taken fuel but had not signed for it. She said that she didn’t have sight of any of
the payments made for fuel and was not sure why this would have occurred. The Finance Officer
offered no explanation for this and the Board were unsighted on fuel costs.
41. During our site visit we were also informed by the Finance Manager that staff use the fuel card or the
account with the local fuel supplier to obtain fuel for personal use. We were told that everyone does
this and it is considered a “perk” of the job. The Coordinator disputes that this takes place and
assured us that staff are aware that they should not obtain fuel for personal use. As there is no
process or evidence of management review to confirm that the fuel costs incurred are only for official
business we can gain no assurance over this area.
Plas Madoc Communities First
Plas Madoc Communities First 21
Payroll
42. Prior to the transfer of the payroll function to AVOW, PMCF operated both a weekly and monthly
payroll for staff. Those on the weekly payroll submitted timesheets which were then processed by
the Finance Officer and those on the monthly payroll were paid a standard monthly sum.
43. Our findings showed that there was a complete absence of segregation of duties with regard to the
operation of the payroll with the Finance Officer having sole responsibility for administering and
managing the payroll.
44. Of more significant concern was our testing of the weekly payroll system which showed that the
Finance Officer paid staff even though the majority of timesheets were not authorised. Furthermore,
he processed and paid his own daughter’s timesheets. We also obtained evidence that he created
timesheets on behalf of his daughter or paid her without any timesheet. At interview he confirmed
that this had happened and stated the reason he paid other staff who had submitted unauthorised
timesheets was that people relied on the money and there was only a short window of opportunity for
processing the timesheets.
45. The Finance Officer by authorising his own daughter’s timesheets, has exposed himself to criticism
particularly as we are aware that he has created timesheets on behalf of his daughter before
processing and paying her wages. This represents a fundamental failure in the existence of
segregation of duties and exposes the organisation to significant criticism of nepotism and
preferential treatment.
46. We also found there was no clear and transparent audit trail demonstrating the hourly rates which
were applicable to staff. A review of timesheets and the corresponding payroll showed that various
rates were applied to various members of staff. Whilst we accept that staff are paid different rates for
different posts and at different times of the day, we consider that there should be far greater
transparency in the rates which are used.
47. We were informed that they use JNC pay scales for weekly and monthly paid staff although PMCF
pays above the average for the sector, as this encourages commitment and retention of staff.
48. We also found evidence of one member of staff being paid twice by submitting two timesheets which
indicated that she had been undertaking two jobs at the same time. This had not been detected by
any management checks.
49. It was also of concern to note that volunteers are paid an hourly rate. Our understanding is that
volunteers should only be paid sums to cover their expenses rather than a waged amount.
50. Our findings showed that the Chair of the Board’s Son has worked intermittently for PMCF. It was a
concern to note that he appeared to buy a laptop and software, for which he was then reimbursed
through payroll. He left PMCF shortly afterwards and we could find no evidence that the laptop was
returned.
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Child Support Agency Issues
51. During our visit we ascertained that the Finance Officer’s salary is paid part through the payroll and
then he invoices PMCF for the balancing amount via his own Company. When querying the
reasoning behind this, we were informed by the Finance Officer that he had done this to artificially
deflate his salary figures for Child Support Agency (CSA) assessment purposes. Furthermore, our
testing showed that since April 2008 £3046.41 worth of payments had been made directly to the CSA
from PMCF. We were informed by the Finance Officer that they related to his own CSA liability and
he was intending to repay the amounts back to PMCF in the future. He stated that some repayment
had already occurred. Our testing showed that £1,989.20 had been recovered from the Finance
Officer’s salary, leaving a shortfall £1,057.21. The Finance Officer stated that he was aware of the
shortfall and the CSA were re-assessing his payment levels and he was confident that this would
resolve the issue.
52. The Coordinator stated that she was aware of the new payment/payroll arrangements for the Finance
Officer’s salary however she was not aware of the issues regarding the CSA payments. IAS are
progressing this matter with the CSA, particularly in view of the apparent measures taken to
artificially deflate the salary figures.
Loans to staff
53. Our audit testing showed that staff within PMCF had been provided with interest-free loans from
PMCF, which were approved by the Coordinator. Whilst a schedule was maintained outlining who
owed loans and the repayments that had been made, there was no formal policy or agreement as to
how the lending of money to staff should be managed and administered. We saw evidence of loans
being repaid through the payroll although it was evident that some members of staff had not repaid
the amount owed and had left PMCF. The Finance Officer admitted that there were outstanding
debts which were unlikely to ever be recovered. We are unable to quantify the full amount of debt
outstanding due to the nominal amounts of money which are sometimes loaned to staff through petty
cash; however we believe the overall sum to be less than £2,000.
54. We asked the Coordinator what the purpose of these loans was and she said that loans were given,
with her agreement, to staff who were in need of them for various reasons. For example the
Coordinator had taken one of her loans from PMCF to pay for a holiday. The Coordinator stated that
she was unaware that some individuals had not repaid loans, as she undertook no review of the
loans process.
55. The provision of loans to staff, particularly when there is no formal policy, does not represent good
financial practice and moreover exposes PMCF to considerable criticism if the “loan scheme” is not
made available to all employees.
Plas Madoc Communities First
Plas Madoc Communities First 23
Caravan
56. PMCF has use of a caravan sited at Rhyl, which is rented out to residents of Plas Madoc to provide
an opportunity to the less fortunate members of the community to have a holiday. Our findings
showed that there is some uncertainty over who owns the caravan; although we found evidence that
a site fee and hire fee are paid annually by PMCF for the apparent rent of an eight berth caravan.
The Coordinator claims that the caravan is owned by PMCF, whilst the Finance Officer originally
asserted that the caravan was rented from the Coordinator’s brother. However, during the latter
stages of our investigation he stated that it appeared that PMCF owned the caravan and the
payments made to the Coordinator’s brother were to maintain the caravan.
57. Our findings showed that a £6,000 fee was paid to the Coordinator’s brother on an annual basis for
the caravan’s maintenance, although we found further evidence that repairs and the maintenance
costs were funded via petty cash, so we are unsure what the £6,000 payment was for. The payment
was made part cash and part cheque. It was observed that the site fees to the caravan park (of
around £2,800) were paid some two months in advance of the payment being made for the hire of
the caravan itself.
58. Whilst there is no direct risk to PMCF of paying cash to a supplier, this does not represent good
practice as cash payment may be requested by suppliers in order to avoid income tax liabilities
and/or VAT.
59. Of more significant concern were our findings relating to the banking of the income generated by the
caravan. Our testing showed that only £60 had ever been banked, although an analysis of the
caravan booking records showed that the following amounts had been receipted through letting the
caravan:
• 2007 - £1735
• 2008 - £1980
• 2009 - £1415
60. This issue was discussed with the PMCF Coordinator who informed us that the member of staff who
had been responsible for receipting the caravan takings during 2009 had been found to be stealing
the money. The member of staff involved was a resident who had been offered support by PMCF
through the opportunity of employment in order to provide her with a more stable lifestyle. The
individual had also received a loan from PMCF of £660; we believe this was to settle rent arrears
and the PMCF loan remains outstanding. The individual concerned had been dismissed the week
prior to our site visit; however the Coordinator stated that the Police had not been contacted as it
was considered to be detrimental to the continued rehabilitation of the individual concerned.
61. We asked both the Coordinator and the Finance Manager for an explanation of what had happened
to the caravan letting monies in previous years and were informed by the Coordinator that the
caravan money was used as an extension of the petty cash when it was needed. For example,
nominal amounts of money (£10-15) were given to residents if they were in financial difficulties and
were awaiting benefits.
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62. We also asked the Finance Officer what his role was in the operation of the caravan lettings and he
was adamant that he had no involvement in any aspect of the caravan hire, lettings or banking of
monies.
63. It should also be noted that during our visit we reviewed the caravan income cash box, which was
held in the PMCF safe and found it to be empty.
64. We have significant concerns over the entire operation of the caravan scheme and would
recommend that with immediate effect there are robust processes put in place to manage the
caravan-letting process. In particular, all income generated by the caravan should be promptly
banked and accounted for in PMCF’s finance system. PMCF are currently in the process of
establishing who has ownership of the caravan.
Petty Cash
65. We have fundamental concerns over the petty cash system in operation within PMCF. Large items
of expenditure are purchased through petty cash including a car that had been purchased for £2,500.
The car had been bought from a relative of the Finance Officer.
66. Furthermore, we found boxes of receipts which had been processed through petty cash but had not
been accounted for, and contained no explanation of why the expenditure had been incurred. We
are aware that the Treasurer had raised concerns over the level of pretty cash used by PMCF with
the Coordinator but no action was ever taken.
67. We also found evidence of receipts attached to petty cash vouchers being less than the amount
provided through petty cash. We were unable to obtain any explanation for this from the Finance
Officer.
68. Our findings also showed that petty cash payments were made to the Coordinator to reimburse her
for items she claimed to have bought even though no receipts were provided.
69. Good practice suggests that petty cash should only be used for items of minor business expenditure
and normally organisations set a financial limit on the value of items paid for through the petty cash
system (often around £50). It was evident from our limited testing that a significant amount of
transactions were processed through petty cash. This represents a significant risk for the following
reasons:
• normal payment authorisation procedures may be bypassed;
• duplicate payments may be made;
• petty cash could be used for the cashing of personal cheques; and
• petty cash may be stolen.
Plas Madoc Communities First
Plas Madoc Communities First 25
Other financial concerns
70. Our testing showed that invoices do not demonstrate that goods/services have been receipted (or by
whom). The Finance Officer stated that budget holders had responsibility for ordering what ever they
wanted as long as the budget exists. Similarly the Coordinator stated that as long as there was a
budget which was not exceeded, she didn’t undertake any review to ascertain what the funds had
been spent on or if value for money had been achieved.
71. We found evidence of several payments being made to the same supplier on the same day. Upon
querying this we were told that payments are split to fall under the bank mandate requirements so
that the Treasurer’s signature is not required. (Any cheque payment above £500 requires Board
approval).
72. During our review of cheque book stubs we also found blank cheque book stubs not completed. We
were unable to establish why this had occurred. The Finance Officer stated that the Treasurer had
been asked to sign blank cheque so that PMCF would be able to pay large sums in the event he was
away and not able to act as a counter signatory. However, the Treasurer asserted that he would
never sign any cheque without a corresponding invoice and he had certainly not been asked to sign
blank cheques prior to receipt of an invoice. It should also be noted that we found no evidence of
any of these cheques being presented at the bank.
73. The actions in paras 71 and 72 are concerning, particularly as the Treasurer visits PMCF almost
every day so therefore is regularly available to sign any cheques (or other documentation).
74. We also found poor accounting procedures in respect of income-generating activities. PMCF hold
events which generate income; however, the income is never quantified, accounted for and often is
not banked. Instead we were informed that this income is used to supplement petty cash and is
used for expenditure on other items within PMCF. We are therefore unable to determine how much
income is generated from these activities or more importantly what happen to the receipted monies.
75. We have already outlined our concerns over the lack of financial information received by PMCF’s
Board and in particular the lack of awareness Board Members had in respect of the annual
Management Letters produced by PMCF’s appointed auditors. We are aware that the Board have
requested more “user friendly” financial information from the Finance Officer, although this has not
been forthcoming. It appears that the relationship with the PMCF auditors was managed by the
Finance Officer and the Chair informed us at our end of audit fieldwork meeting, that he had been
contacted by the partner responsible for the PMCF audit who had informed him, that on an annual
basis the auditors offered to attend the AGM to present the accounts and audit report, as is normal
practice. The Finance Officer had apparently declined the offer on several occasions stating that he
was able to present the information to the Board himself. Subsequently the Finance Officer was
unavailable to attend the Board meeting; this happened on several occasions.
26
Construction Work
76. Some of the original allegations claimed that construction works undertaken on the Coordinator’s
house were paid for by PMCF. Prior to our initial site visit we received specific evidence in respect of
this matter. However, we have not been able to corroborate any of these claims primarily because
PMCF’s Peris Road premises was being re-developed at the same time as the construction works on
the Coordinator’s own property, so we have no way of knowing whether the invoices paid through
PMCF’s finance system were for valid Peris Road works or for materials which were subsequently
used elsewhere. Furthermore, the invoices and delivery notes show no evidence of where the good
and services were to be delivered. The Coordinator states that these allegations are without
foundation. We are unable to substantiate any of the claims in this area.
Payments to Board Members
77. We saw evidence of a payment of £10,000 in respect of play area project management fees for one
Board Member who is also a Plasterer by trade. (His wife also works for PMCF as the PMCF
Play/Early Years Participation Officer). We saw no evidence that these services were procured
through open competition or the exact specification/purpose of these services. The Coordinator
stated that they had used this individual as he was a local man who had previously done work.
However, it appears that there was never any disclosure to the Board that work had been awarded to
a Board Member.
78. This Board Member also received payment for the “Get out and Play Scheme” and submitted weekly
timesheets to claim payment.
Driving Lessons
79. We found evidence that since March 2008 £3,080 has been spent on driving lessons for staff and not
for the community. The Finance Officer stated that this was a perk although he did indicate that he
believed this was eligible Communities First expenditure. We later established that this is not eligible
Communities First expenditure.
Mediafields
80. Our findings showed that there is a significant amount of expenditure made to a company called
Mediafields for IT hardware, software and support services. In addition there is also significant other
IT expenditure made through outlets such as Staples and through petty cash. We were informed that
when PMCF were initially set up Mediafields were recommended by AVOW as they offered an
excellent service and good value for money. Considering the level of payments to Mediafields, we
would suggest that PMCF need to test the market and obtain quotes to ensure that Mediafields
continues to offer the best value for money.
Plas Madoc Communities First
Plas Madoc Communities First 27
Asset Register
81. Our testing showed that the asset register is not complete or up to date. It is very difficult to
ascertain how many assets are within PMCF or their location. For example, we have been unable to
determine exactly how many laptops are currently in operation within PMCF. This was queried with
the Finance Officer who admitted that a number of laptops had gone missing and the asset register
was not up to date. Furthermore, he stated he leaves the asset register until the year end for the
Auditors to do as “he had been lazy”.
Other unusual items
Parking Fines
82. Our testing showed that parking fines incurred by PMCF staff had been paid for by PMCF. We
queried this practice with the Coordinator who could offer no explanation, even though her own fines
had been paid for by PMCF. The Finance Officer stated that he paid the fines as he was told to do
so by the Coordinator.
Accommodation Costs
83. We also identified that PMCF staff often attend courses and conferences. Our testing showed that
expensive hotel rooms are often booked, particularly in the case of the Coordinator. In one case the
Finance Officer had attended a digital photography course which was held over a weekend in
London; his partner also stayed at the hotel which was paid for by PMCF at a cost of £330. During a
period of bad weather, a local hotel was booked for the Coordinator to enable her to easily access
her place of work. The cost of this was £713.70. The Coordinator claims that the Board approved
this expenditure. Upon discussion of this issue with the Chair, he stated that whilst he had been
aware that the Coordinator had chosen to stay locally during a spell of bad weather, he certainly was
not aware that PMCF had paid for the accommodation.
Gifts to staff
84. We also found evidence that gifts are bought for staff for various occasions (birthdays, wedding etc)
through petty cash. On most occasions the petty cash is refunded through staff contributions but we
are unsure why PMCF monies are used for this purpose. We could obtain no explanation for this.
Christmas Party
85. Evidence was found of an invoice for the 2008 Christmas party totalling £2667.30. This party was for
staff within PMCF and there was evidence that many of the staff attending the event had contributed
to the cost via salary deductions, but not all staff made a contribution.
86. Furthermore, no contributions had been obtained from staff for Christmas parties held in previous
years, which were held in Manchester and therefore also incurred an overnight stay.
The report also found there was no real oversight from either WAG or the Plas Madoc Communities First board, who were responsible for the limited company. Despite receiving more than £3.5m of public money over seven years, it appears the board members - who include the local councillor Paul Blackwell as well as other prominent members of the community - did little to ensure that money was spent properly.
At a time when public money is tight and getting tighter, misusing it on such a scale is a scandal. The involvement of the police appears inevitable but who will now police those who were meant to guard the public purse? The current board of Plas Madoc Communities First must be replaced and the community must take ownership of this failing flagship so they decide how and where the remaining money is spent for the good of that community.
UPDATE: The report makes reference to a whistleblower. Without her coming forward and putting up with threats, innuendo and abuse from a range of people and organisations this report would never have been written.
6 comments:
- cynicalHighlander said...
- Cosy family arrangements like Glasgow CC etc. Would the same party political links mirror that.
- 17 March 2010 22:15
- Labour Nepotism said...
- The Chairman of the Trustees of PMCF is the Deputy Head of Ysgol Rhiwabon and his son was employed by PMCF, no doubt WCBC will want to ascertain further information...possibly an investigation. The Police MUST investigate Miriam Beard and Cllr Paul Blackwell MUST stand down as a Councillor, he has let his community down.
- 17 March 2010 22:48
- Why the hell havent the police arrested both Miriam Beard and the Finance Officer in the light of this damning ivestigation? Gunning has confessed to defrauding the CSA!
- 18 March 2010 08:26
- Anonymous said...
- JEEZ, THEY MUST OF HATED THE PEEPLE OF PLAS MADOC TO SEND THEM TO A CARAVAN IN RHYL FOR A 'HOLIDAY'.
- 18 March 2010 08:27
- Anonymous said...
- How many Labour members on that board? Paul blackwell's nomination papers were signed by Alvin Evans and Brien Powell, the chair and treasurer of PMCF. http://www.wrexham.gov.uk/assets/pdfs/elections/nop/PLASMADOC_NOP.pdf
- 18 March 2010 18:37
- Anonymous said...
- These board members and staff members are negligent and if they have assets such as houses they should be made to sell these and pay the tax payers of wales back. Has WAG got the balls to see this through properly. Expenses scandal etc they must thing people with glass houses should'nt throw ....
