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Wales Audit Office - Unlawful action at Town Council

Failures in decision making and internal control at Town Council results in loss of £234,000

Connah’s Quay Town Council has incurred a cumulative deficit of over £234,000 in the operation of the Quay Café since 2011, according to a report issued yesterday (19 June 2019) by the Auditor General for Wales. The report states that the council did not give due consideration as to what powers it had to open Quay Café, the decision was based on a poorly prepared business plan, and as a result, the decision to open the café was unlawful.

The report was issued in the public interest to draw attention to the significant deficit incurred by the Council and their failures in decision making. The report makes three clear recommendations for the council and these are:

  • To undertake a full option appraisal for the operation of Quay Café, incorporating a full financial appraisal of each option;
  • To ensure appropriate advice is received prior to making decisions on the provision of new or novel services;
  • To review the services it provides and ensure that it understands the statutory basis on which it provides those services.

Connah’s Quay Town Council now has one month to consider the issues raised within the report and to make a decision on whether to accept these recommendations.

This report is issued alongside public interest reports for Glynneath Town Council, Maenclochog Community Council and Cynwyd Community Council. The reports set out significant failures in governance arrangements and inadequacies in financial management and internal control at all four councils.

The Auditor General for Wales, Adrian Crompton said:

"Given the scale of the deficit incurred at Connah’s Quay Town Council, I believe it is important that the public has a full and proper awareness of the events concerning the Council. When it opened the café, the Council did not have the statutory authority to do so and its decision was not supported by a clear and coherent business plan. As a result the decision was, in my view, unlawful.

"There are lessons to be learnt not just by this Council, but by all town and community councils in Wales. The public interest reports issued yesterday serve to highlight the shortcomings at four different town and community councils. Councils need to be innovative in dealing with community issues, but they must at all times display appropriate risk management and operate within their legal framework.

"All four councils now have an opportunity to demonstrate that the risk of such governance failures recurring is reduced to a minimum. The public need to be assured that town and community councils have proper governance arrangements in place to manage the activities of the council both financially and administratively."

Notes to Editors:

  • Acting under delegated arrangements and on behalf of the Auditor General for Wales, the Assistant Auditor General has issued this report under section 22 of the Public Audit (Wales) Act 2004.
  • The Auditor General is required to consider whether to issue a report in the public interest on any significant matter coming to his or her notice in the course of an audit, and to bring it to the attention of the audited body and the public.
  • It gives the Council an opportunity to explain the important steps it has taken to improve arrangements and to ensure that the risk of such failures recurring is reduced to a minimum.
  • After a report in the public interest is issued, the Council is required to consider the report at a full meeting of the Council within one month of the date of issue. At the meeting, the Council must decide whether the report requires it to take any action; whether the recommendations in the report are to be accepted; and what action (if any) to take in response to the report and recommendations.

Related publications: 

Original article link: http://www.audit.wales/news/unlawful-action-town-council

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