Auditor General for Wales raps two local councils for not meeting financial and governance responsibilities

The Auditor General for Wales has found two local councils to have fallen short of their financial responsibilities, with one local authority failing to prepare its annual accounts for five years, while the other was found to be carrying out unlawful procurement practices.

In his report on Llanferres Community Council, the Auditor General found "significant and systemic" shortcomings in the council’s procurement methods, which saw it act unlawfully.

"My audit identified poor procurement practices and that the council failed to comply with its own Standing Orders and Financial Regulations," the auditor said.

"As a consequence of these failings, I consider that the council acted unlawfully and has failed to ensure that it has in place proper arrangements to secure value for money."

In the 2020-21 financial year, the council spent £25,000 on ground works and new equipment to redevelop a playground. However, the council failed to advertise the contract for tender. 

Instead, it approached individual companies for quotes, which breached the council's standing orders and financial regulations.

The report later noted that: "Although the council determined which companies to award contracts to on the basis of a comparison of quotations provided at its 14 January 2021 meeting, the supplier chosen for the groundworks cannot be clearly identified as providing best value and the most cost-effective solution for the works."

Following the findings, the auditor considered other procurement exercises carried out by the council and found that its overall approach to procurement was poor and the failures were systematic.

It raised particular concern that the council does not record in its minutes any rationale for the acceptance of quotes which are not the lowest received.

As a result of its findings, the Auditor General recommended the council review its procurement arrangements to ensure it complies with its own standing orders and financial regulations.

It also called on the council to ensure that council approvals are obtained for any departures from standing orders and financial regulations and ensure the rationale for the selection of suppliers following a procurement process is clearly recorded in the minutes.

The Auditor General’s second report was on Ammanford Town Council. It described "serious failures" in financial management and governance, which saw the town council failing to approve its accounts for five years between 2016 and 2022.

This meant the council did not properly account for almost £800,000 of money raised from council tax.

The Auditor General also found that the council had initially failed to respond to his provisional findings and conclusions and noted a "lack of action" by the council in response to serious deficiencies identified by its internal auditor during 2017-18.

"In my opinion, this indicates the lack of awareness of its responsibilities for the management of public funds," the Auditor General said.

Seven recommendations were made to Ammanford following the report, which included a call for the council to review its accounting records and establish appropriate procedures to ensure its annual accounts are prepared and approved by the deadline of 30 June each year.

Commenting on both cases, Adrian Crompton, Auditor General for Wales, said: "The councils' failures to make proper arrangements for financial management and reporting are rightly a matter of public concern. It is important that both councils learn from the findings in my reports and address the deficiencies I have identified. 

"Council members have a responsibility to residents to ensure the proper stewardship of public funds and that the council properly account for the money they have been entrusted with."

Both Llanferres Community Council and Ammanford Town Council have been approached for comment.

Adam Carey