Lessons to learn? Are you REALLY in control of your council's finances (Brierley Town Council Public Interest Report)?

The below article was previously published by us in 2015. We are reposting it below as we are increasingly identifying inadequate management of risk by some of the councils who use our Internal Audit Service. Whilst this is perhaps to be expected in the year immediately following an election, where many new councillors may not know the responsibilities they have for ensuring proper internal controls are in place, we would hope that the levels of compliance improve for the 2024-25 financial year. The council referred to below actually invalidated their insurance cover for fraud due to them comprehensively failing to ensure internal controls were in place and risk was managed. As such, the public ended up paying for the 6 figure fraud that took place.

Many involved in the sector will know of the large scale fraud which took place at a Town Council in Yorkshire a few years ago, even if you don't know the Council (Brierley Town Council) by name.

The Public Interest Report relating to this was published earlier this year (see link below) and LRALC would strongly recommend that as many councillors and clerks as possible read it. We recommend this as there are a number of weaknesses in the council's processes identified which potentially allowed the fraud to take place and which, if we are being honest, are perhaps some of the more common (though still infrequent) areas of weakness in the sector.

Also of interest are the very real risks highlighted in the seemingly 'minor' issue of grant applications being made in the name of a local council without the council having actually resolved in a meeting to apply for such a grant.

The report below highlights the potential risks of councils (i.e. councillors) becoming lax in following the 'proper practices' and ensuring they are in full control of council finances.