The Isle of Wight council’s Audit Committee heard last week of staggering incompetence by a council officer that has directly resulted in the council giving half a million pounds to a business that was declared bankrupt.
The committee heard the unnamed council officer was actually tasked with ensuring that any outstanding purchase orders for Pihl Ltd were cancelled, after it was learned that the business had gone into administration. Instead the officer did the opposite and made a payment of £517,878 inc VAT (£431,565 ex).
OnTheWight reported Pihl filing for bankruptcy over a year ago. Nothing has been heard about this from the council in the meantime.
Money still not returned
Over a year after the company’s bankruptcy, the money still hasn’t been returned, despite the council’s Head of Finance, Stuart Fraser, telling the Audit Committee that “Immediate steps were taken to recover the money and this process is ongoing”, the CP reports (front page, 3rd October edition).
An internal council investigation excused it as ‘Human error’.
Stuart Fraser sought to reassure the committee the money is not lost for ever; “The money is being held in a separate account and will not be absorbed as port of the administration of the company.”
Currently unknown when money will return
The CP report does not specify when the council hopes to actually have the money back under their control. OnTheWight has posed the question to the council.
Why is this information only now coming out? The Audit Committee, lead by Cllr Reg Barry, brought this to public attention by airing it at the Committee. By law the council has to be audited by an external company once a year. Their report has just been published (below) including a tiny block of text in the middle of the report.
Officer incompetence unchecked internally
The officer’s incompetence was able to proceed unchecked. The council’s own procedures were so weak that this lone council officer was able to make a payment of over half a million pounds without any senior officer clearing it before the money was handed over.
Only now the council has introduced a procedure to confirm that payments of public money made for over £100,000 pounds are correct.
When asked if the staff member had been reprimanded, Isle of Wight council told the CP, “Any issues relating to staff have been dealt with internally.”
OnTheWight has asked the council for details.
Audit report
Image: davidmasters under a CC BY 2.0 license
