26/04/2018

'Failures in Fundamental Controls' - Report on Fraud at Dundee City Council


Regular readers will remember the case of former Dundee City Council employee Mark Conway who stole over £1 million from Dundee City Council.  Monday evening's meeting of the City Council dealt with  a report produced by the Accounts Commission on this.
This is a report which every councillor and every citizen of Dundee should  be very very concerned about.
 
We need to start by being clear that one person, Mark Conway, is guilty in this and he was convicted in court.  But we should also be very concerned about a report which says that 'failures in fundamental controls within the council allowed this fraud to continue over a prolonged period.'

As a councillor I need to be able to trust the advice that I am given by officers.  I need to know that financial statements are accurate.  The report by the Accounts Commission demonstrates that this has not always been the case.
As councillors we need reassurance from officers that there will be no repeat of this.  We need reassurance that this cannot happen again.  We also need to know why auditors did not pick this up.

We also need a reassurance that council cuts did not contribute to this and allow one member of staff to accumulate a number of permissions and checks and balances were not in place.  The report points out that the individual concerned built up lots of responsibility over the years and was one of very few individuals who understood the systems.  The lack of segregation of duties allowed him to produce fraudulent invoices, pay them and then hide the evidence.  Despite strenuous denials from officers I find it hard to believe that the cuts which have led to fewer and fewer people working for the council did not contribute to this fraud.

At the Scrutiny Committee I proposed that the committee went further and wrote to the bank and building society concerned and the Treasury as well as the Gambling Commission and the Department of Culture, Media and Sport.
To say that I am disappointed with the responses would be an understatement.  We expect regulators to assist us.  In this case I feel that we did not get the protection that we could have expected from the banks, building societies, Financial Conduct Authority and the Treasury.  Neither did we get protection from the gambling firm William Hill, the Gambling Commission or DCMS.
In these times of austerity imposed on Dundee City Council by the UK and Scottish Governments why did these organisations not help us through their regulatory powers?
With regard to gambling I think that we should have a look at the support which the council gives and supports across the city to problem gamblers.  It strikes me that the gambling industry looks upon the occasional fine or ex-gratia payment as part of the cost of doing business.  Perhaps we should be stricter, perhaps we should question whether William Hill is a fit and proper organisation to hold a licence within the city.  I will certainly be making the case for more regulation of gambling.
What we need to know is that lessons have been learnt and officers have taken all appropriate actions to protect the public purse in the future.