Unlawful expenditure and inadequate governance arrangements found at St Harmon, Magor with Undy, Llanmpumsaint and Sully Lavernock Community Councils in Wales  

Significant breakdowns in financial management and internal governance arrangements at four councils resulting in unlawful expenditure at one of the councils, of over £86,000, and increased costs for audit, according to reports in the public interest issued today by the Auditor General for Wales.

There are systemic weaknesses in governance and internal control at St Harmon Community Council. Our audit found that the Council had acted unlawfully when appointing its Clerk/RFO, co-opting members, awarding grants and contracting for the supply of services. We also noted that the Council has failed to comply with various legislative requirements including those related to the preparation, approval and submission for the audit of its annual accounts.

During 2018, broken relationships within the Magor with Undy Community Council adversely affected how it conducted its business, in areas of decision making, financial management and internal control. The Council failed to follow its own internal procurement services rules resulting in unlawful expenditure of over £62,793, and its processes for the appointment of staff are poor incurring an unlawful expenditure of £22,337.

Notwithstanding that the requirements for the annual accounts and audit are the same for all community councils across Wales, Llanpumsaint Community Council has failed to submit annual accounts for audit. This non-compliance includes the refusal of the Council’s Clerk to discharge his responsibilities and his obstruction of the audit process. Consequently, the cost of the audit has increased significantly.

Sully and Lavernock Community Council has a long-standing history of conflict between members and appears to have become dysfunctional. During 2018-19, the Council failed to take sufficient steps to satisfy itself that its governance arrangements are effective.

The reports make a number of recommendations to the councils, including the review of:

• Financial regulations
• Governance arrangements
• Recruitment and employment
• Member conduct
• Independent renumeration
• Disclosure of payments

Auditor General, Adrian Crompton said today:

“Significant deficiencies in governance, financial management, audit transparency and inadequate arrangements to secure value for money are just some of the matters at four community councils that I’ve found. These issues highlight serious weaknesses in the Community Councils, undermines public trust and has led to a waste of public money. I call on all Town and Community councils to take heed and learn from the important lessons within these reports so that communities in Wales get the services and the assurance they rightly deserve.”