Audit Wales report finds serious financial failings at town council

Lewis Smith, local democracy reporter

Serious failings in financial management and governance at a town council in Bridgend County Borough have been outlined in a report published by Audit Wales.

Maesteg Town Council were said to have failed in carrying out their own financial controls, and created an environment which could be ‘exploited to defraud,’ according to the report issued by the Auditor General for Wales.

The Auditor General’s report, carried out in public interest found ‘prolonged poor governance and financial management,’ at Maesteg Town Council, just days after 76 year- old clerk Margaret Buckley was jailed for swindling them out of £238,000.

The clerk was sentenced to two years and four months in prison, after admitting she defrauded Maesteg Town Council, and conned councillors who signed blank cheques which she then used to commit fraud totalling £238,205.54.

Omissions

The subsequent report had also found significant inconsistencies and omissions in the council’s accounting systems and records, stating it was their responsibility to put proper controls in place.

It read: “Under the Accounts and Audit (Wales) Regulations 2014, the Council is responsible for putting in place proper financial management and internal controls. However, these arrangements are only effective if they are operated properly.

“When Councils fail to implement proper financial arrangements, there’s a risk of loss to the public purse, and this is seen in the case of Maesteg Town Council. Our report in the public interest found that the council failed to exercise the minimum standards of financial management and governance expected of a town council.

“Between March 2016 and December 2019, the former Clerk of Maesteg Town Council defrauded the Council of £238,000 – representing up to 27% of the Council’s total non-pay expenditure in each financial year.

“Failing to follow proper financial procedures created an environment in which the former Clerk was able to exploit to defraud. Council members serving during the former Clerk’s tenure failed to properly scrutinise the financial information presented by the former Clerk.”

The report also added several recommendations for Maesteg Town Council that included putting in place proper scrutiny for the work of the clerk and deputy clerk, and ensuring that its proper internal controls, including authorisation of payments were followed by all members.

Internal controls

Adrian Crompton, Auditor General said the crimes committed against the town council highlighted just how important these internal controls were.

He said: “Failing to carry out financial and governance checks and controls can have serious consequences for town councils.

“The fraud committed against Maesteg Town Council highlights just how important it is to establish effective internal control and internal audit systems, and town councils across Wales can learn from this report to minimise the risk of this happening again.”

Llynfi Valley Labour Party added: “This has been a desperately sad episode in the proud history of Maesteg Town Council.

“We look forward to working with others including the wonderful community of Maesteg to rebuild the reputation of this Town Council and to refocus the Council on serving the community we are elected to represent.”