WARNINGS about the way Bournemouth council was recruiting consultants were suppressed for two years, an inquiry has revealed.
Two critical reports went unnoticed because of a flawed reporting system that allowed a top officer to sign off a report highlighting concerns about his own employment.
The reports, which are dated July 2010 and November 2011, were kept from councillors and only brought to the attention of the council's new director of finance following a Freedom of Information request from the Daily Echo in May this year.
A council investigation has concluded there was no evidence the reports were deliberately withheld but said there was a fundamental lack of control that exposed the council to major risk.
Liberal Democrat leader Cllr Carol Ainge said: “It's shocking to think that reports of such significance were not brought to councillors' attention for so long. I hope lessons are learnt so that this never happens again.”
The results of this investigation are due to go before a special meeting of the audit and governance committee today.
The July 2010 report investigated the recruitment of four consultants - interim human resources service director Tony Sweeting, interim executive director for business improvement Manjeet Gill, her successor Mike Forrester and interim head of transport James Duncan.
In all four cases, there was no evidence the council followed the proper procurement process to hire them. All four went on to receive significantly higher wages than they would have done if they were normal council employees.
This report was given a “category 3” status, which meant that it did not rate as serious enough to be reported to the audit and governance committee.
A second audit report in November 2011 highlighted the same issue. Again concerns about Mr Forrester's employment status were raised, along with the way in which a sheltered housing manager and an interim senior accountant were recruited.
Again there was no evidence the proper procurement process had been followed and the consultants were being paid inflated wages.
This report was given a “category 5” status - the highest possible. Because of this, it was reported to councillors but only as a brief summary and there was no mention of the 2010 report.
The investigation reveals this report was signed off by Mike Forrester, who was the Section 151 officer at the time and so responsible for ensuring the lawfulness of the council's financial arrangements.
The inquiry concludes that it was “wholly inappropriate” for him to sign off a report which scrutinised his own appointment.
Since concerns were raised about consultants at Bournemouth council, a new finance team has been put in place and immediate action has been taken to tighten up staffing arrangements and restructure the audit and management assurance function.
The investigation concludes: “I am satisfied that the new chief executive, new Section 151 officer and new monitoring officer have been actively addressing these matters since their appointments earlier this year.
“The council's overall governance arrangements are being significantly strengthened as a result, with the support of the leader and members of the audit and governance committee.”
Tony Sweeting was procured by the council through a company called Practicus Ltd and started undertaking work for the council as interim head of human resources in 2009.
The July 2010 report revealed that as at February 2010, he was still providing services to the council at a total cost of £96,846. No evidence could be found of any attempt to put this contract out to tender.
Manjeet Gill was procured by the council in August 2009 from a company called Chameleon Business and Management to oversee the business improvement cluster. (A search of directors reveals that a Mrs Manjit Gill was a director of this company until December 2009)
This lasted for a period of four months and cost the council £68,200. Again the July 2010 report warned there was no evidence that a proper procurement process had been followed. A contract was drawn up but was never signed by the company.
Mike Forrester joined the council in November 2009 to continue the interim running of the business improvement cluster.
He received the vast majority of his salary through his own one-man company Valfor Ltd, slashing his personal tax bill.
The July 2010 report warned that, as at February 2010, he was still providing services to the council and that there was no evidence of a procurement process being followed.
The second report highlights the same concerns, along with the fact that when he took on the role of the Section 151 officer, he started receiving his council salary in two different ways - the majority through Valfor and the remainder through the council payroll.
As the council's Section 151 officer, Mr Forrester signed off the summary report, despite the fact he was one of the subjects of it and of the 2010 report.
James Duncan was procured by the council in April 2008 as the temporary head of transport, initially from a company called Penna PLC.
The normal annual salary for that role was £50,603 but the July 2010 report warned that, as at February 2010, he had provided services to the council totalling £300,005.
Unnamed sheltered housing manager. The services of this employee were acquired through an agency in 2006 but in January 2008, he set up his own company and received his council salary through ACH Consultancy Ltd. Between January 2008 to September 2011, he was paid £150,966.87.
A contract was in place but it expired on March 31, 2008 Unnamed interim senior accountant. This employee was paid by invoice but had income tax and national insurance deducted because his details were on the council's payroll system. He was paid £36 an hour, 71 per cent higher than the normal senior accountant's rate of £21.10.
In September 2011, the Echo put a series of questions to the council's press office about Mr Forrester's contract.
The council responded with a statement that confirmed he was employed on a rolling contract and submitted invoices for his time through his own company Valfor.
The council said: “Invoiced costs for Mr Forrester remain in line with those associated with the employment of an Executive Director for the council...We consider this to be acceptable and appropriate for a role responsible for the delivery of savings well in excess of the annual cost of employment.”
In February this year, the Echo ran a story about how Mr Forrester had slashed his personal tax bill by receiving most of his wages through a one-man company.
Then chief executive Pam Donnellan said the arrangement was an efficient use of taxpayers' money.
In May 2012, the Echo submitted a Freedom of Information request asking to see a report by auditors about the use of consultants at Bournemouth council.
This request was refused on the grounds that the report was due for future publication. But this investigation reveals the Echo's FOI request was instrumental in bringing this issue to light . The audit report was brought to the attention of the acting monitoring officer Tanya Coulter in early June 2012, who then brought it to the attention of the new Section 151 officer Liz Wilkinson.
They informed the council's audit and governance committee of the issue and organised the investigation, which has now concluded.