News

12.09.18

Northamptonshire councillor’s firm paid £60,000 by council-owned company

A firm partly-owned by a Northamptonshire county councillor allegedly received a payment of £60,000 from a company owned by the authority, local media has reported.

The BBC Local Democracy Report claimed that Conservative member Andre Gonzales De Savage’s company Explore Communications received a payment from the NEA Properties Ltd— a company wholly owned by the council— for “tourism promotion and business support” in May 2012.

A Freedom of Information request by Labour party member Liam Costello in 2014 showed that Cllr Gonzalez requested a Northamptonshire County Council accountant to make the payment to Explore Communications.

The BBC reported that one email from Cllr Gonzalez on 25 May said: “Can you put the payment together for the £60k to Explore (for tourism promotion and business support) and we will then get acknowledgement via the agreement with NEP (Northamptonshire Enterprise Partnership).”

The claim comes at a time where a separate independent audit report found no evidence of improper spending or improper management from NEA Properties, “but in the absence of various records, only limited assurance can be provided.”

The audit report found that the company paid for a flyover by a vintage aircraft, and spent £80,000 at Northampton Saints Rugby Club— which included the hire of a hospitality box.

It is unclear, however, that the auditors were aware of the £60,000 payment to Explore Communications.

The authority, which agreed to merge local authorities earlier this month after severe financial difficulties, has said it has opened an external investigation into the company.

A Northamptonshire County Council spokesperson confirmed that the external investigation will be into NEA Properties as a whole— not just an investigation into the payment to Explore Communications.

“An independent, external review into NEA Properties has been commissioned by the council,” a spokesperson for Northamptonshire County Council said. “As such we are not in a position to comment any further on this matter until we receive the outcomes and findings of this review.”

Today, reports in local media surfaced that auditors KPMG had raised concerns about how NEA Properties— which closed last year— had not been audited since 1995; but, when the concerns were raised to the council, the auditors were told not to audit the company because it was being “wound up.”

The KPMG report said: “In May 2017, we once again raised a query with the then Section 151 Officer regarding the accounts of NEA Properties and the fact these had, to our knowledge, not been audited since 1995 (either by ourselves or others).

“This appears to have been based on the historical position that the company met the small company exemption and therefore was not required to have an audit. However, we raised the issue with the Section 151 Officer that NEA Properties Limited should be subject to an audit as a subsidiary of a Local Government body, i.e. Northamptonshire County Council, which does not report itself to Companies House, and also for transparency and accountability reasons.

“We communicated to the authority that should the small company exemption not apply, then the authority would be required to retrospectively have the company’s unaudited accounts audited.

 “We asked the authority to confirm whether subsequent to 1995 NEA Properties Ltd continued to be controlled by NCC and what the council’s basis was for the company’s accounts not being audited in light of it not meeting the small company exemption. However, we were informed that the authority still did not want the company audited as it was being wound up.”

PSE has been in touch with Cllr Gonzalez for comment.

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Image credit: Hazel Nicholson

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