There is trouble at t' mill in County Hall over the county council's apparently very lax grip on the administration of grants.
Next week's meeting of the full council will as usual be asked to "consider" or "receive" a huge stack of reports, recommendations and committee meeting minutes, all within the space of a couple of hours. Buried among the hundreds of pages of bureaucratic statements, facts and figures are the minutes of a meeting of the Audit Committee held on 11 July. The language used is unusually strong and critical, but it should come as a surprise to no one. In fact, as the Audit Committee itself pointed out, this has been going on for years.
The minutes have barely got into their stride before we read this (note the use of capital letters in the first line):
Reference was made to Report C and the Fundamental
Weaknesses identified in the Domestic Abuse and Appetite for Life grants
process. The Committee noted that both reviews had identified that the
standard of documentation retained and the evidence available to support
eligibility and outputs was insufficient to place an assurance that the
grant terms and conditions, the Project Grants Manual and the
Authority’s Financial Procedure Rules had been fully complied with.
Turning to the report itself (confusingly entitled Report B), it emerges that it was the Chief Executive's own department which got the worst marks when it applied for a Domestic Abuse grant totalling £27,500 on behalf of an unnamed third party. The internal auditors' findings included the following:
There was no formal agreement in place outlining
roles and responsibilities ensuring the requirements of the Grant
conditions and Grant objectives were met.
We don't know which agency received the grant, but one likely candidate is Hafan Cymru, based in Carmarthen and no stranger to controversy itself.
Hafan Cymru was in the news back in June of this year. It was set up to tackle domestic abuse and provide
housing for the victims. In essence the finance officer
was sacked after she blew the whistle on the chief executive and two
other senior managers for awarding themselves large pay rises while the
rest of the staff were asked to work longer hours and take a 3% pay cut.
few years ago the charity paid £15,000 to cover the cost of an
"essential" MBA degree course for its chief executive. If the Masters
was so essential, perhaps the charity should have hired someone who
already had such a qualification - there are plenty of them knocking
Hafan Cymru, which is based in Carmarthen,
receives over £5 million of public funding a year, including from
Carmarthenshire County Council. It describes itself as a charitable
housing association, but is not a registered charity, preferring to
operate instead as a company regulated by the FSA. Anyone wishing to inspect the charity's accounts will have to fork out £15 for the pleasure.
receiving almost all of its funding from public finance, not one of the
members of the Board is a representative of the bodies which provide the
In the grand scheme of things, £27,500 is not a lot of money, but the Audit Committee report goes on to provide details of much larger applications. One of those was £157,169 awarded in 2011-12 under the Welsh Government's Appetite for Life scheme (improving the quality of food and drink in schools). The report noted:
A significant amount of additional audit work was
required to enable an Audit Certificate to be authorised allowing Welsh
Government to release funding. There were issues with the quality and
completeness of the Grants File ensuring an effective audit trail, there
was ineffective monitoring and reconciliation processes and there were
issues with regard to compliance with the Authority’s procurement rules.
The committee went on to examine a separate and equally damning report produced by the Wales Audit Office. Although only a quarter of applicable grants were submitted for audit, the WAO found serious errors in more than half of them. Worse than that, the WAO noted that it was responsible for auditing only about 60 of the 300 or so grant schemes in the council.
The fee for this work carried out by the WAO amounted to an eye watering £160,000, and as the WAO itself points out, there is something of a double whammy here because sloppy work by council staff has led to both a significant loss of grant income, with many grant applications having to be scaled back, and increases in auditors' fees.
The two most dramatic examples of grants having to be reduced were an £86,000 hit on a project in the Cross Hands East development (the council submitted a claim for ineligible expenditure), and what is termed a £1 million downwards "technical adjustment" in an application for School Building Improvements where the form had been incorrectly completed.
The WAO also provides a handy summary of which council departments are the worst offenders. Step forward Meryl Gravell's Regeneration and Leisure portfolio which was the runaway winner in terms of most qualified applications (14 out of 18 dodgy claims).
This should come as no surprise. The minutes of Cllr Gravell's decision meetings show all kinds of grants being ladelled out for hot tubs, solar panels, "bespoke falcon rearing facilities" and much more besides.
In one recent case
an Independent councillor, Andrew James, was awarded over £27,000 by
his party colleague, Meryl Gravell, to fund the construction of a toilet
block, solar panels and a hot tub at his caravan park. Neither apparently saw any need to declare an interest. In another case an applicant
received £25,000 for two hot tubs and a pair of gazebos for her holiday
cottages (that almost makes Cllr James's grant look like value for
money). In another case a holiday cottage owner was handed £10,000 to
install a solar panel system to heat a hot tub and holiday cottage.
Other recent awards have included a "bespoke falcon rearing facility" (£70,000) and a World War One trench system (£16,700).
reports on these grant awards are subject to public interest
exemptions, so we do not know all the details, but some of these grants
must have been very close indeed to 100% of the cost.
argument is that these "investments" in tourism infrastructure will
attract more visitors who will spend more money in the local economy.
Whether anyone books a holiday cottage on the strength of the fact that
it has solar panels is doubtful. Those grants serve only to boost the
bottom line of the individuals who own the cottages by reducing their
It is likely that some visitors will be attracted by a hot tub, but will
the £25,000 spent on the two hot tubs and accompanying gazebos be
matched by at least £25,000 of additional spending by visitors in local
shops, pubs, etc.? Probably not. In reality, Meryl is swapping £50 notes for a fiver.
A lot of the money being dolloped out here is EU funding, and Edwina Hart appears to have smelt a rat. In an interview earlier this year the Minister hinted that in future EU money will have to be more wisely spent in
Wales, with involvement from the private sector in preference to
"hundreds and hundreds of partners with pet projects", many in the
But back to Carmarthenshire.
Who is to blame for this unholy mess? Not the council's senior officers, obviously. The Head of Financial Services put the blame squarely on low-paid temporary staff:
These staff would often leave prior to completing of
the grant as they were mindful that their contracts would shortly be
coming to an end.
Implicit in his statements is an admission that nobody checks the work being done by these lowly contract staff, even though the sums of money involved are sometimes huge.
The Audit Committee minutes report that some unnamed bright spark had a solution to this: punish low-paid temporary staff by giving them job references which reflected their failings.