Last week I reported that I had had a meeting with Barnet Council's auditors, Grant Thornton. I also had the pleasure of Mrs Angry's company who has also reported on the visit. It was a very polite and well mannered meeting but Mrs Angry and I raised a number of very serious issues which we believe should be addressed by the auditors.
I subsequently wrote to Mr Hughes from Grant Thornton confirming the details of my concerns and he has had an opportunity to raise them with the council. I have set out in summary my concerns but I have not gone into too much detail as I hope several of the items are under detailed investigation.
As we know from the Internal Audit report, there are some serious issues with the procurement system. It is therefore a logical step to consider the workings of the payments system which was the focus of my investigations. I reviewed a sample of approximately 100 invoices and the key findings were as follows:
Most invoices do not contain a purchase order number, contrary to the Council Procedure Rules, Financial Administration 12.7 If this happened occasionally it would be understandable but, of the invoices I reviewed, over 80% did not have a purchase number on the original invoice suggesting this procedure is not being followed.
There is very little or no supporting information on over half the invoices I reviewed. This lack of detail prevents any independent person (such as an internal auditor) checking the validity of the invoice without going back to the originator of the purchase order. I showed Mr Hughes a number of examples where payments over £1 million had been passed without the sort on information that any reasonable person would have expected to be included.
Some invoices had not been stamped as checked and others had been stamped as checked but with no indication as to who had checked them or authorised the payment.
There were two invoices which gave me very serious cause for concern as the description given on the invoice could in no circumstances explain the enormity of the invoice. As Mr Mustard mentioned yesterday these invoices simply didn't pass the "Sniff Test". Now it may be that they are perfectly legitimate payments and it was simply that the invoice description that was wrong but these invoices had simply been stamped checked, one, the very next day after it had been submitted with no evidence of any questioning.
Taken separately all of these items could be explained away, but taken together they must raise sufficient concerns about the performance and operation of the payments department to warrant a more thorough investigation.
I remain concerned that the management focus on One Barnet had led to senior managers taking their eye off the ball on the day to day running of the council and this merely serves to reinforce that view. I look forward to reading the auditor's final report which will be submitted to the Audit committee on 6 September and hope that they have taken my comments seriously.