Latest Public Sector News

11.04.19

Council overpaid staff more than £800,000 as watchdog raises national concerns of ‘recurring weaknesses’ in financial control

A Scottish council made more than 800 salary overpayments totalling over £800,000 to current and former employees, Scotland’s spending watchdog has revealed.

A report from the Accounts Commission has raised concerns over “recurring weaknesses” in financial control at councils in Scotland which are dealing with annual fraud of £11.9m.

The report raises one alarming case study, when Renfrewshire Council made over 800 overpayments between April 2015 and February 2018 amounting to a total of £812,000.

Six overpayments exceeded £10,000, and one person received an extra £15,500 whilst an eighth of former employees were still paid after leaving the council “usually due to a delay in a department notifying Payroll Services staff someone had left.”

Whilst at the time of the external audit there were no documented procedures for preventing payroll overpayments, the council has since issued guidance for recovering the money – and by March last year, £350,000 of the overpayments had been recovered.

The report from the Accounts Commission raised several examples where money was lost, such as a £1.1m in fraud by a council officer who was later jailed for five years, and said robust scrutiny of financial management was “more important than ever.”

The commission said auditors are flagging concerns and “recurring weaknesses are becoming apparent,” particularly in processing information, reviews, and separating employee’s duties to prevent fraud.

It warned of “serious” consequences such as the loss of significant amounts of public money, impact on public services and reputation damage to local authorities.

Graham Sharp, the chair of the Accounts Commission, said: “Robust management and scrutiny of the finances at Scotland's councils is more important now than ever before.

“Councils face complex and challenging financial pressures, and rising demand for services. At the same time, budgets are tightening and there is significant uncertainty from factors such as the UK's withdrawal from the EU.

"There are many examples that the systems for managing finances in Scotland's councils are working effectively.”

He added: “However, councillors are ultimately responsible for scrutinising a council's use of public money, and they should seek assurances from council officers that rigorous systems and processes are in place to safeguard finances.”

The president of COSLA, Alison Evison, said the report was a timely reminder of the pressures facing local government but praised the scrutiny work of councils to date and said councillors take this role seriously.

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