An external auditor has slammed the council for ‘lack of clear policies, procedures and guidance’ following a probe into former Tory leader Mike Jones’ spending on his council credit card.
Grant Thornton was asked to check an internal inquiry by Cheshire West and Chester Council director of corporate services Mark Wynn who found Cllr Jones ‘did not breach council policy’.
Robin Baker of Grant Thornton praised the council investigation but concluded: “Our findings indicate that at the time the expenditure was incurred, clear and comprehensive policies and procedures were not in place for purchase card use.”
Cllr Jones (Con, Tattenhall) was leader of CWaC until Labour took control in May 2015.
He was the only council member with a ‘purchase card’ which was used to pay for food and drink – including hospitality for council guests such as meals and alcohol – rail travel, parking and hotels during the course of his council business.
But concerns were raised about some of the transactions following a Freedom of Information request by Labour councillor Ben Powell.
The auditor noted the policy on the use of purchase cards was tightened in November 2013.
But the findings were: “Both policies state that the card ‘must not be used’ for subsistence, travel and accommodation. The former leader used his card for such purposes throughout the period. The use of the card for subsistence would appear to be in contravention of the council’s standard ‘Purchase Card Policy (pre-November 2013).”
When the new policy was introduced Cllr Jones signed a compliance slip but added a hand written amendment so that he could use the card for spending on car parking, hospitality, miscellaneous and business expenses because of his unique role as council leader.
The auditor continued: “...when he returned his declaration for the ‘purchase card procedure’ (post-November 2013) he exempted himself for this and was not challenged on it. This may undermine any suggestion that he contravened the policy for such purchases after November 2013.
“Both council policies place responsibility for achieving best value for money on the cardholder. As no information has been provided to show which if any of the transactions would have achieved better value for money had corporate contracts been used, it would appear in our view, not possible to conclude if this part of the policies were contravened.”
The council agreed to the auditor’s following recommendations:
■ Create a framework around expenditure on gifts and hospitality
■ Tighten the compliance procedure for staff or members with ‘any attempt’ to deviate from policies and procedures to be ‘addressed promptly’
■ A wider review on hospitality spending
■ Identify any transactions on former leader’s card that relate to subsistence and consider asking for reimbursement where approved limits were exceeded
In a letter to Cllr Jones, investigator Mr Wynn wrote: “The council recognised, in a report to Audit and Governance Committee in November 2013, that its arrangements for the monitoring of purchase cards and its policies could have been improved.
"Improvements were put in place subsequently, and a new policy was implemented. There are some large transactions on your card prior to this date which, with the benefit of hindsight, look difficult to explain in monetary terms (could the same outcome have been achieved at lower cost), however, there is no apparent breach of any council policies at the time.
“After November 2013 clear policies were in place across the council. I am aware that you asked for your role as leader to be considered differently in relation to the approved policy, amending the cardholder declaration as below (your amendments in italics): ‘I have read and understood the Purchase Card Procedure and I will adhere to this different procedure, as previously agreed it’s different for myself re: usage for car-parking / hospitality / misc expenditure etc’.
“There is no facility within the council for an officer or member to personally amend a council policy for their own role. However, I cannot find any correspondence from the council to yourself disputing your request.
“Even under the assumed circumstances that hospitality was an acceptable area of expenditure post November 2013, I note that a sum of £459.64 was spent on alcohol (an area clearly stipulated as not allowable spend on purchase cards) after this date. I would ask that you repay this sum to the council.”
Cllr Jones declined to repay the money.
In response to Mr Wynn, he wrote: “Since much of the value regarding the small number of the items you suggested I should consider is repaid, was for hospitality for guests of the council, in my view it is an unreasonable request to make as they were legitimate expenses to incur.
“I am not entirely sure why alcohol is an issue as the council itself has spent money on alcohol for guests, an example being at the Lord Mayor making. Therefore to separate out the expenses I incurred on behalf of the council to be treated in a different way, is in my view unreasonable.
“I also reflect on the huge achievements of the council between 2008 and 2015, which as leader I played a central role. These included obtaining significant funding for the council projects such as for schools, Storyhouse, the bus exchange, the £8.2m for the proposed regeneration of Ellesmere Port Centre and some additional funding for highways.
"Therefore after due consideration I will not repay any monies as I believe it is inappropriate.”
Cllr Jones suggested he was a victim of a political revenge after he made accusations against two Labour opponents , adding: “It is therefore clear to all that this was a vexatious and politically motivated allegation by the Labour Party.”
He requested a summary of the costs of the investigation as he considered the whole exercise had been ‘a complete waste of council taxpayers’ money’.
