Auditors criticise failure of council to take legal advice on pay-off for senior staff member

South Somerset District Council did not take legal advice when it paid off a senior staff member while its Monitoring Officer and S151 Officer were unaware of the agreement reached, auditors have revealed.

In its annual audit letter for 2020-21, Grant Thornton said South Somerset also lacked capacity to comply with the final accounts process and had departed from “the principles of prudent activity” in its commercial property investments.

Commenting on the pay-off, Grant Thornton said it had “concerns that there was a lack of due process, insufficient records were maintained to evidence how the agreement was reached including consideration of the lawfulness of the payment and that the agreement does not reflect value for money”.

Both the Monitoring Officer and the Section 151 officer had been unaware of the matter, the auditor said.

It said that in any future similar situation the council must comply with financial regulations, standing orders and its constitution, ensure that appropriate consultation takes place with the statutory officers and assure itself of the legality of the transaction including seeking legal advice.

Great Thornton said South Somerset should have ensured its finance team had sufficient capacity to produce the annual financial statement by the deadline.

It said the council should produce a clear plan to mitigate risks from its commercial strategy.

The audit did though not find any significant weakness in the council’s financial sustainability or on improving economy, efficiency and effectiveness,

Chief executive Jane Portman said: “It’s our duty to ensure that we deliver value for money for South Somerset. We accept and regret that the management controls that were in place did not operate as they should have done on this occasion. 

“The controls have been reviewed by management and a revised procedure that takes these findings into account will be recommended to our next meeting of council.”

Ms Portman said of the pay off that it had been “investigated to the fullest possible extent to ensure we can move forward with confidence that such an incident cannot occur again”.  

South Somerset is in its final year before becoming part of the new Somerset county unitary council next April.

Mark Smulian