Readers will recall the disbelief of many of our community when the Town Council decision to order a Forensic Audit into the financial activities of Hemsworth Town Council was apparently ignored by Councillors Moran, Hird and Middleton who chose to engage King Accountants, the auditors suggested by the Town Clerk – Alan Draper and disgraced former Chair – Jim Kenyon.
These auditors are not trained in forensic auditing.
Previous Ferret posts have informed readers of the difference between an “ordinary Audit” which is basically to ensure the books balance and a forensic audit which is an investigative audit undertaken where there is suspicion of fraud or wrongdoing.
Councillor Moran is even on record as saying that this audit would be better than a Forensic Audit.
However Ferret’s description has turned out to be correct, unfortunately for this community who have had to bear the as yet undisclosed cost, of this inappropriate financial check that has been estimated as being between £5000 to £10000.
Who actually says Ferret was correct?
None other than King’s Accountants, on the first page of their report, no doubt being inserted as a “get out clause” should this community ever get the investigation that was needed and agreed to by the full council that may just then reveal the truth.
Extracted from Report by King Accountants:
“As discussed at our initial meeting, a forensic audit is a very specific type of audit and is usually carried out when some kind of fraud or misappropriation is suspected or alleged. A forensic audit is carried out with the purpose of identifying evidence to be used in a court of law. We have not been made aware of any specific allegations and we have not been appointed to carry out a Forensic Report”
This is repeated just a few lines later in the report:
“We have not carried out a statutory or forensic audit”
So there we have it, they have not been made aware of any specific allegations to investigate!
Ferret believes there is little more to say on this Kenyon and Draper supported report.
However Ferret will highlight just a “sample” to use a word, of items reported. Their investigation has only been on “samples”.
Use of Card Machines:
Ferret finds it interesting that that they have checked the use of the card machines and find no issues, but Ferret finds their explanation interesting if not naïve, that the “occasional” presence of a second machine is because of “breakages or malfunctions”
Dare Ferret suggest that if one is broken or malfunctioning it would not be on the counter but off the counter away for repair, therefore leaving only one on view?
Does this explain the multiple card machines that have been reported as being seen in use?
Ferret believes not. Perhaps a Forensic Auditor would have investigated a little further?
Items supplied from Councillor’s businesses:
Once again the accountant makes excuses, this time around the purchasing of items from a councillors business,
Ferret again wonders why the accountant chose to do that instead of putting it in plain language:
Good practice and transparency weren’t followed. Records should be kept of goods purchased directly from councillors and their businesses.
Cost comparisons should be made and kept from other suppliers to show that goods were purchased at a fair price.
Machinery purchases compared to hire:
Quote from report.
“We were asked to compare the costs to HTC to the potential hire costs of similar machinery”
Really? Ferret wonders why there was no mention of:
The Digger being bought before the purchase was authorised by the Council?
Why it was parked on Kenyon’s drive for weeks before hand?
Perhaps a forensic auditor would have looked into these aspects as well?
Ferret was also surprised to see an auditor having to make assumptions about machinery usage.
“As no records are available for the machinery, we have had to make assumptions about its usage” and “We have discussed usage with HTC and been advised that the above items were used on average one week in every two months.
Why?
After all HTC should use cost headings for jobs with staff hours allocated appropriately for budget purposes to report to the town council every 3 months.
So, when HTC failed to provide usage figures for the machinery to the auditor, how on earth can the auditor provide any realistic or accurate costings figures based on their usage without any evidence?
More importantly, why would an accountant want to provide potentially misleading figures that are not worth the paper they are printed on?
It’s another one of those pesky coincidences that the figures used, provide a break even amount obviously.
Check all invoices are from legitimate business:
Kings auditors have by their own admission not checked all invoices but only a sample, and once again aren’t the important points really:
Have any of these firms’ undisclosed connections to councillors or council staff?
Where VAT has been paid to these firms, are they actually VAT registered?
Hemsworth Town Council is exempt for most VAT payments and reclaim it back from HMCR. Do the payments match the reclaimed figures?
Review of petty cash:
Well done to King’s accountants for spotting petty cash usage has increased, and for spotting the following discrepancies at the lakeside:
A councillor has failed to provide a receipt for a sum of £70
Cash held was £5.78p more than expected.
Increasing fuel prices have had an effect on the level of petty cash expenditure’
They have also advised on alternative methods of payment to reduce the level of petty cash.
Well done or is it?
Ferret wonders why there is no mention of the thousands of pounds that have been used for the last 3 years in petty cash payments.
It can’t be that important then, can it?
Ferret believes the worthlessness of this report is summed up in its conclusion:
We (King’s Accountants) have carried out a detailed review into the record keeping and procedures of Hemsworth Town Council and we have not identified any issues.
By Kings Accountants own admission of their remit, this accounting report has basically done what has already been done every year and has not gone into the detail or the aspects that would be part of a Forensic Investigation, where fraud or misappropriation is suspected.
Ferret believes it was an ill informed decision not to follow council instruction for a forensic audit, that led to, what has frankly been another waste of money and a large waste of money this township can ill afford.
No wonder Draper and Kenyon took control right from the start.
Perhaps councillors Moran and Middleton would like to explain why they preferred this to the real Forensic Audit that was approved by the council?
Perhaps they may like to consider reimbursing this community for the costs involved?
Perhaps King’s Accountants may wish to be appointed as Internal Auditors to Hemsworth Town Council next May?
Here is the report:
Oh dear me. I am sure you are aware that myself and others were essentially blocked during Public Questions when voicing our concerns regarding HTC failing to commission a Forensic Audit. Its on a Live Stream in the archives now. It was so funny (not) that I was cut off with the claim tgat “we have run out of question time.” It is also of concern that good councillors have taken these concerns as personal criticism, and essentially threatened to resign if the public is not happy with the decision to undertake a non forensic audit. We need these Councillors more than ever, and let’s be honest they acted in good faith. But, there are clearly continuing concerns and the public will not be happy with the conclusions drawn and the incompleteness of this “ordinary” audit. Regards
This was only to be expected given the remit they worked to unfortunately it was not what was asked for. Even then it is very surprising the way it was written, showing nothing but bias and support by offering excuses for the council.
Their job was to do the report and present findings yet they appear to be acting as defence witnesses. Any excuses should have come as a reply from the council.
A complete an utter waste of time and money. They should never been engaged in the first place as they have not dealt with any areas on concern that have been raised by the public.
Total utter whitewash and proves the auditor used was never going to uncover the true financial mess the Independant HTC run council have caused.Why were they allowed even after a vote to use a recommended auditor of Draper and Kenyons choice alarm bells were ringing from the parishioners so alarm bells should have rung from the voting councillors and a full forensic audit should have been brought in to do the financial investigation and not a whitewash audit .The parishioners deserved better and repeatedly asked for the full forensic Audit that’s when they were not shut down at public questions or ignored when sending in emails and FOIs for answers the parishioners were and are entitled to be given.Time now NOT to listen to any advise or recommendations from the former chair or Town Clerk but to correct and put right and use the correct people to put an end to the total financial mess and restore what this community deserves and needs a council run by decent committed community councillors so work together and with the support of the community bring in the changes as the community will do with our VOTES.
An absolute whitewash which is just as the parishioners expected. I hope the councillors who agreed to this are proud of themselves as they are culpable along with the cabal and Draper! I understand some are upset with the public’s outcry but I have no sympathy with them. You get what you ask for!!
The last thing this report should cause is a blame game the community are sick and tired of all the dealings and games that have gone on over the last 3 years under the Independent cabal reign,time now to show the parishioners that the good hard working councillors can work together with our support and continue the Independants downfall ,to put this right a full forensic audit should be completed and yes the public will have to pay another huge bill but to obtain the correct financial misgivings it must be done.Councillors must realise that the public have huge concerns and these concerns must be dealt with correctly and the parishioners will continue to turn up at meetings and use public question time to ask and should be given answers.No blame game show the community that you can work together and continue with the great achievements that working together as already achieved .
But there is blame. Some councillors stopped the forensic audit by agreeing to the watered down audit. Why? That is not supporting the community and that was the one chance they had to do something and they blew it! Why would the community want them representing them when all they are doing is supporting the cabal! Pretty clear that they are not fit for purpose I’m afraid.