Report lays bare Barnet Council fraud and incompetence

A report by audit firm Grant Thornton has laid bare the stark failings of Barnet Council’s One Barnet contract. The report was commissioned after a Capita employee was found to have committed over £2 million worth of fraud over two years, by submitting fictitious Compulsory Purchase Orders (CPO) payment requests on regeneration estates, which were paid into the perpetrator’s bank account and the accounts of members of their family.

The report states that:

“Our detailed work on regeneration related financial processes has confirmed that there are other significant weaknesses in financial controls operated by Re and CSG (The Capita contracts), in addition to the CHAPS (Clearing House Automated payment System) payment process which, had they been identified and addressed earlier, are likely to have resulted in detection or prevention of the fraud.”

It also says:

“There were no written down procedures within Treasury Management to explain to the team the processes and checks to guide them through the CHAPS payment process. The lack of procedures meant that officers within the Treasury Management Team did not understand what checks they should be undertaking. This was compounded by a lack of procedures and knowledge amongst Treasury Management staff on what paperwork was considered appropriate to support a CPO payment.

“In some instances there was no supporting documentation provided supporting the Treasury Management Urgent Payment Request form and the Treasury Management Team still released the payment. The Treasury Management Team did not confirm with the recipient of the funds that the bank account numbers were correct. This control would have been key to preventing the fraud.”

London Assembly Member for Barnet and Camden Andrew Dismore said

‘This report is damning, and blows the lid on the total lack of control Capita had over public finances. This is a major breach of contract, and the Council must now terminate the Capita contract entirely. There can be no trust in anything Capita say, they have demonstrated total recklessness and unreliability. The appointed auditor and Government appointed commissioners must now come in and take over the running of Barnet Council. The Conservative administration must be cleared out, they have totally failed the borough with their disinterested and lackadaisical approach to contract management.

‘There is another question too – this fraud happened in December 2017, why has this report only been published now – 9 months later?’

ENDS

Notes:

  • Andrew Dismore is the Labour London Assembly Member for Barnet and Camden
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