Payments to senior staff losing allowances were 'unlawful', says WAO
Payments by Caerphilly council to senior staff losing car and annual leave allowances were unlawful, the Wales Audit Office (WAO) has confirmed.
The WAO said the decision was taken without proper authority by officers who would benefit personally from it.
Accounts for 2012/13 showed the payments cost the council £218,000.
Caerphilly said it had voluntarily referred the matter to auditors and taken steps to address the areas of concern highlighted in the report.
The council is at the centre of a separate police investigation into £270,000 worth of pay rises for senior staff, and its former chief executive and his deputy remain suspended.
On Thursday the WAO explained there were three reasons why its appointed auditor Anthony Barrett had decided the authority had acted unlawfully over the allowances:
- The decision to pay them was taken without either "proper authority" or "clear recording" of how it was made and was not taken by a formally constituted body of councillors.
- All members of the chief officers group that took the decision had a conflict of interest "as they held a pecuniary or personal interest in the decision".
- There was no evidence the decision to buy out the allowances was published.
Mr Barrett said: "There are clear lessons to be learned by the council around the processes that were followed when deciding to buy out the chief officers from their entitlement to car and annual leave allowances.
"The informality of meetings and decisions, the conflicts of interest, the lack of record keeping, the failure to follow advice and publish decisions - these are all of significant concern and the public needs to be aware of what has happened."
He said the council had a month to respond to his report and to highlight the steps it was taking "to ensure this never happens again".
Current leader of Caerphilly's Plaid Cymru opposition group, Colin Mann, was a cabinet member at the time the payments were decided on by the senior staff members.
"I feel councillors have been let down badly and the trust that existed has been severely strained, if not broken altogether," he said.
"We now need a special audit of the affairs of Caerphilly County Borough Council to find out whether any other payments have been made that ignored standing orders and financial regulations.
"The whole situation is scandalous and the public have every right to be outraged, as I am."
Council interim chief executive Stuart Rosser said: "This issue dates back to early 2012 and it should be noted that the council voluntarily referred the matter to the auditors for investigation in April 2013.
"Residents can be assured that the council has already taken steps to address the areas of concern identified in the report.
"In addition, the council has been working very closely with the Wales Audit Office over recent months to address concerns about its governance arrangements and has introduced a number of improvements to ensure processes are much more robust.
"These actions are currently being assessed as part of a corporate governance inspection being undertaken by the auditor general for Wales with a further report on this anticipated early in the new year."
Mr Rosser added that the WAO report would be carefully considered by the council and it would meet in January to consider what further actions were needed.