Minutes:
(Exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act, 1972. It was considered that in all the circumstances of the case the public interest in maintaining the exemption outweighed the public interests in disclosing the information).
The committee considered the final report of the independent auditor appointed to carry out an investigation into the manner in which Neighbourhood Wellbeing Grants were awarded in 2016 and 2017.
The Director of Corporate Services presented the report and the independent auditors conclusions. The auditor had concluded that the approval of the projects was undertaken in accordance with the county council’s decision making processes and was therefore lawful. However, the Cabinet Member should have limited their involvement to setting the overall scheme objectives and principles. Officers should have been asked to administer all other aspects of the scheme, including determining which projects were recommended for funding using pre-determined criteria.
The committee was advised that providing the names of certain individuals were redacted, the independent auditor's report could be the subject of a separate report to the Full Council on 13 December 2018.
Following debate, it was proposed that the report to Full Council should include recommendations on any necessary changes that may be required to the constitution and scheme of delegation to reflect the recommendations of the Independent auditor.
Following further discussion and questions to the officers, the following narrative statement and proposed resolution was moved:
"The report by the independent auditors, 'Veritau', presents an alarming breakdown in the proper mechanisms for controlling the county council's expenditure. The report demonstrates what can happen if a county councillor adopts the roles of officers and those officers charged with the responsibility of ensuring financial probity at all times are then unable to carry out their responsibilities effectively.
The report is a damning indictment and it is of concern that, as Cabinet Member for Health and Wellbeing, County Councillor Ali:-
· Gave instructions that all applications for a grant should be submitted only to him.
· Screened the applications for grants without any predetermined criteria for their determination.
· Did not retain a record of those projects not approved by him nor of the reasons for their exclusion.
· Changed the threshold suggested by officers for those applications requiring further checks.
· Approved grants to organisations known to him and in his own division of Nelson East and approved grants totalling £268,000 to organisations in Nelson and the surrounding area.
Committee is also concerned that in publicising the awarding of the grants, some Labour County Councillors sought to give the impression to their electorate that these grants had been given by the Labour Party and not by Lancashire County Council.
Committee therefore resolves to request the Chief Executive and Director of Resources to:
i) Report to a future meeting of this Committee setting out the responsibilities of Lancashire County Council's officers in relation to council expenditure and outlining a protocol to be followed when grants are awarded to community groups and other voluntary bodies.
ii) Report this matter to Lancashire Constabulary for investigation to determine if there has been any fraud, misconduct in public office or a criminal breach of electoral law".
It was Moved and Seconded that the proposed resolution be amended to include the words highlighted in italics:
'To request the Chief Executive and Director of Resources to:
i) Report to a future meeting of this Committee setting out the responsibilities of Lancashire County Council's officers in relation to council expenditure and outlining a protocol to be followed when grants are awarded to community groups and other voluntary bodies with a view to reporting to Full Council in due course.
ii) Report this matter to Lancashire Constabulary for investigation to determine if there has been any fraud, misconduct in public office or a criminal breach of electoral law.
iii) Submit the report to Full Council as a Part I item with any necessary redactions."
On being put to the vote the Motion was Carried. The substantive Motion was then put to the vote and it was therefore:
Resolved:That the report by the independent auditors, 'Veritau', presents an alarming breakdown in the proper mechanisms for controlling the county council's expenditure. The report demonstrates what can happen if a county councillor adopts the roles of officers and those officers charged with the responsibility of ensuring financial probity at all times are then unable to carry out their responsibilities effectively.
The report is a damning indictment and it is of concern that, as Cabinet Member for Health and Wellbeing, County Councillor Ali:-
· Gave instructions that all applications for a grant should be submitted only to him.
· Screened the applications for grants without any predetermined criteria for their determination.
· Did not retain a record of those projects not approved by him nor of the reasons for their exclusion.
· Changed the threshold suggested by officers for those applications requiring further checks.
· Approved grants to organisations known to him and in his own division of Nelson East and approved grants totalling £268,000 to organisations in Nelson and the surrounding area.
Committee is also concerned that in publicising the awarding of the grants, some Labour County Councillors sought to give the impression to their electorate that these grants had been given by the Labour Party and not by Lancashire County Council.
Committee therefore resolves that the Chief Executive and Director of Resources be requested to:
i) Report to a future meeting of this Committee setting out the responsibilities of Lancashire County Council's officers in relation to council expenditure and outlining a protocol to be followed when grants are awarded to community groups and other voluntary bodies with a view to reporting to Full Council in due course.
ii) Report this matter to Lancashire Constabulary for investigation to determine if there has been any fraud, misconduct in public office or a criminal breach of electoral law.
iii) Submit the report to Full Council as a Part I item with any necessary redactions.