Sunday 7 July 2013

Council grant management 'weak' says the Wales Audit Office

With financial armageddon on its way to Welsh local authorities, Carmarthenshire, we are told, will have to 'save' somewhere in the region of £12m rather than the expected £5m next year. The 'drawing down' of grants to support essential services is already vital for public bodies and Carmarthenshire Council is no exception, with millions of pounds worth of grants funding everything from the Bwcabus to Community First schemes.

However, a recent Wales Audit Office report (April 2013) to the council as part of the annual audit, indicates that yet again, for the fourth year running, all is still not well in the world of grant management and its getting worse;

'Arrangements for the production and submission of grant claims remain weak which is exposing the Council to risks, resulting in a loss of funding and increased audit fees'.

For example, the fees for auditing the Collaborative Communities Grant has more than doubled due to the extra work involved in identifying the ineligible expenditure

Many grant claims are complex and involve other agencies such as the Welsh European Funding Office (WEFO) but Carmarthenshire compares badly against the Wales average with two out of every three grant claims that are audited requiring adjustments, amendments and qualification. Agreed, the consequential loss is small in the grand scheme of things but the significance is that a) the situation is worsening, b) every penny counts and c) some of the concerns raised by the WAO below suggest a much deeper problem;

...some claims are submitted late;
...forms are incorrectly filled in;
...ineligible or unapproved expenditure is included;
...there's a lack of supporting evidence;
...audit fees to certify grants have increased, despite less claims being submitted;
...there's no system of monitoring payments/grants to third parties and
...contracts are not always awarded in accordance with Standing Orders.

Only sixty out of three hundred grant schemes run by the council were audited by the WAO and given their concerns, the WAO took an extra fifteen samples and found similar weaknesses, across all departments, increasing the risk of 'poor decision making and inappropriate expenditure'

Another concern was that 'Contracts not awarded in accordance with procurement procedures', the WAO recommends that the staff responsible, even for small contracts, receive extra training in correct procedures.

Grant reductions due to 'ineligible expenditure' included £86k for Cross Hands East development and £29k for Collaborative Communities. An 'adjustment' of £1m was required for a school building improvement grant due to incorrect completion of claim forms.

Ineligible expenditure included
...goods not received,
...activity outside the claim period and
...audit fees incorrectly included in the claim.

According to the report there is no system in place to monitor whether third parties have used the grants/payments awarded to them for the purpose for which they were intended and, with the absence of an audit trail, public funds could be at risk.

Take the Towy Community Church for example, how did a steel clad bowling alley in a distinctly non-rural part of Carmarthen attract a Rural Development grant of £25,000 intended to improve access to services and regenerate agricultural areas of Wales? And another £25k grant intended to safeguard local legends, history, culture, art and language and maintain the town, and the county's, unique character?


Anonymous said...

Hmm I seem to recall that ineligible activity was AWEMA's downfall!

Cneifiwr said...

It will be difficult to spin the WAO report. In addition to the criticism of lack of controls, sloppy working practices and failure to adhere to rules, the WAO makes it painfully clear that working with the council was a very frustrating experience.

Anonymous said...

Weak or simply incompetent!

Tessa said...

Blimey - WAO actually criticising CCC. Must be bad then!