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Caerphilly Council car and leave allowances payments 'unlawful'

Wales Audit Office L

Appointed Auditor publishes report in the public interest

Caerphilly Council Borough Council - Chief Officer Essential Car user and Annual Leave Allowances - Report in the Public Interest

Link to Report

Caerphilly County Borough Council acted unlawfully when it paid its Chief Officers to 'buy out' their entitlements to an Essential Car User Allowance (ECUA) and Annual Leave Allowance (ALA). The Appointed Auditor, Anthony Barrett, has published a report today to draw the public's attention to a failure in governance arrangements at the Council and inadequacies in the processes it adopted in making these payments.

There are three matters which led the Appointed Auditor to reach this conclusion. Firstly, the decision to buy out the allowances was done without proper authority or clear recording of how the decision was made. It was not taken by a formally constituted members' body, even though, in respect of the Chief Executive, only the Council had the power to take such decisions.

Secondly, the Chief Officer group all had a conflict of interest, as they held a pecuniary or personal interest in the decision. These interests were not declared and one or more of these individuals took part in the decision-making process.
Finally, there is no evidence that the decision to buy out these allowances for Chief Officers was published, contrary to the Council's Constitution in respect of delegated decisions.
Appointed Auditor and Assistant Auditor General, Anthony Barrett, said today:

"There are clear lessons to be learned by the Council around the processes that were followed when deciding to buy out the Chief Officers from their entitlement to car and annual leave allowances. The informality of meetings and decisions, the conflicts of interest, the lack of record keeping, the failure to follow advice and publish decisions - these are all of significant concern and the public needs to be aware of what has happened. The Council now have one month to respond to my report and to highlight the steps it is taking to ensure this never happens again."


The Appointed Auditor has issued a report in the public interest under Section 22 of the Public Audit (Wales) Act 2004.
An Appointed Auditor 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 is 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.
The Auditor General for Wales is responsible for appointing auditors of local government bodies. Once appointed these auditors are legally separate persons who exercise their own statutory functions independently.
PWC carry out the audit work at Caerphilly County Borough Council on behalf of the Appointed Auditor.
The Wales Audit Office mission is to promote improvement, so that people in Wales benefit from accountable, well-managed public services that offer the best possible value for money. It is also committed to identifying and spreading good practice across the Welsh public sector.

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