Following reports in the media that Penmaenmawr Town Council’s financial reserves were almost exhausted and that urgent cuts were needed to balance books, and serious concerns raised by residents, the Welsh Audit Office has published its review of the Council’s accounts for 2013-14 to 2018-19. Responding to the findings, Janet Finch-Saunders, Assembly Member for Aberconwy, has called on Penmaenmawr Town Council to accept and act upon all recommendation, and is herself asking the Welsh Government to review the support and guidance available to town and community councils across Wales in the hope that such a financial crisis does not occur again.
There are numerous shocking findings. The Auditor General for Wales has written: “My audit findings show long-standing inadequacies in governance, financial management and internal control at the Council... They also reveal tensions and lack of mutual respect and trust within the membership of the Council which are not helpful to either its reputation or to the delivery of services to the residents”.
The findings include:
- The Council has been spending at an unsustainable level over the last three years and its ability to rely on its financial reserves has been time-limited.
- The Council’s overspending is rightly a matter of public concern.
- The Council has apologised for its management of public finances and accepts that this is not in keeping with the high standards expected of a local council.
- Several failings in the Council’s governance which are equally attributable to current and former officers of the Council and the Councillors themselves.
- The Council did not exercise enough scrutiny of the accounts and annual governance statement prior to approving the annual return.
- The Council’s governance arrangements are inconsistent with the positive disclosures it makes about them in its Annual Accounts, and that these disclosures are factually inaccurate and misleading.
- The Council’s budget setting and monitoring arrangements were ineffective and did not safeguard it from the over reliance on reserves.
- That there was not a proper understanding of the make-up of its reserves or any effective controls to ensure they were used in line with their intended purposes.
- The Council’s internal auditor escalated their concerns about weaknesses in budget setting and monitoring but these went unheeded by the Council.
- The Council’s arrangements to ensure appropriate declarations of interest are insufficiently transparent and diminish public confidence in its accountability.
- The Council also needs to improve the consistency and transparency of its procurement arrangements.
- There is no evidence that members of the Council have personally benefited from the public purse.
- Significant tensions within the membership of the Council.
- That it is not the Auditor’s role to blame any group or individual within the Council for the tensions that are apparent in his audit, but “that the situation is damaging to the reputation of the Council and is detrimental to the interests of the local community”.
Commenting on the report Janet said:
“I thank the Auditor General for carrying out a robust investigation.
“I appreciate that Penmaenmawr Town Council supports many community projects, but its strikes me as extremely irresponsible that it has been spending at an unsustainable level over the last three years.
“This has come at a time in which residents of Penmaenmawr have faced eyewatering increases in their council tax precepts.
“Penmaenmawr Town Council is now back on a more sustainable financial footing, but I do believe that there has to be some accountability for what the Auditor has described as a ‘financial crisis’.
“More so, I have been saddened to learn of allegations that there is a bullying culture and that councillors have been voting like sheep without relevant information.
“The Council is required to consider the report at a full meeting within one month of the date of issue, and decide what action to take in response.
“I call on the remaining councillors to consider accepting and acting upon all the recommendations made by the Auditor General, and issue a statement to that effect.
“I will be asking the Welsh Government to review the support and guidance available to all town and community councils across Wales in the hope that such a financial crisis does not occur again”.
ENDS
Notes:
Council overspending exhausts reserves