A Tower Hamlets council audit report paints a grim picture of an almost total lack of control in relation to the awarding and monitoring of grants across the borough.
The internal audit report, which covers the period September 2014 to November 2014, describes a culture within Tower Hamlets council that seems to have little or no interest in accounting for public funds.
Issues identified included not verifying that grant money was actually being spent for the purpose the grant had been awarded, no monitoring visits to organisations, expense claims not supported by receipts and two Lunch Clubs not being certified as food premises.
Highlights of the report, which is available for download from the Tower Hamlets council site here (PDF), are given below.
Monitoring and Control of Mainstream Grants (MSG)
These issues were found across the Communities Localities and Culture (CLC), Education Social Care and Wellbeing (ESCW) and Development and Renewal (D&R) Directorates:
- There were no documented monitoring procedures in place for those organisations receiving MSG funding for the Youth & Connexions projects and Luncheon Clubs.
- Actual monitoring consisted of a ‘desk top’ evaluation of the output data submitted by the project organisations.
- No monitoring visits were carried out to these organisations.
- There was no verification of actual project expenditure to ensure that the grant was only used for the purpose for which it had been awarded.
- In addition, claims for expenditure incurred by the organisations in the audit sample were not supported by bona fide evidence
Anyone fancy some cash?
To summarise this would seem to indicate that grants were handed out like sweeties, the only monitoring was dependent on the honesty of the organisations that got the grants but if these people decided to spend the grant money on whatever else they fancied and claim anything on expenses no one in Tower Hamlets council would ever know.
The report was submitted to members of the Tower Hamlets Council Audit Committee.
They were not very impressed. Here is the view of the Labour Group.
“We – and the public more widely – have strongly held concerns over what community groups have received grant money and how much funding they receive” said Cllr. Rachael Saunders, Leader of Tower Hamlets Labour .
“Transparency has been severely lacking, both with regard to the mainstream grant funding and Section 106 funding. With millions of taxpayers’ money going to grant funding, it’s vital that the new grants process is transparent, fair and proper. The Labour Group is seeking to work with the [DCLG] commissioners to that end.”
And there’s more. Much more.
We found the following specific issues on Luncheon Club projects:
- An examination of the quarterly monitoring information for the sample showed that some service providers were not achieving the targeted outputs for which the grant was awarded
- We found that two organisations in the sample of five, had reported that they had not been registered as food premises with the Council’s Environmental Health Team. Such registration was a prerequisite of the grant award, and hence we were not clear as to how these organisations continued to receive grants
- It was noted that only one of the five organisations in our sample had recorded receipt of LBTH MSG [London Borough of Tower Hamlets Mainstream Grants] in their statement of financial activities.
So some lunch clubs were not delivering the amount of lunches they had stated they would deliver, two of the five samples were not even registered as food premises (what?!) and only one had even bothered to state the grant money in their accounts.
Youth Connexions projects
- There were no documented monitoring procedures currently in place for those organisations receiving MSG funding for the Youth & Connexions projects.
- Actual monitoring consisted of a ‘desk top’ evaluation of the output data submitted by the project organisations
- No monitoring visits were carried out to these organisations
- There was no verification of actual project expenditure to ensure that the grant was only used for the purpose for which it had beenawarded
- Claims for expenditure incurred by the organisations in the audit sample were not supported by bona fide evidence
- The collection of output information did not include equal opportunities monitoring data which is a requirement for grant funded Third Sector Organisations. This represents non-compliance with Grant conditions. [LW emphasis]
- Officers did not have full contract documentation which included the formal offer letter setting out terms and conditions of the grant and agreed outputs and outcomes. In absence of these documents, we were not clear how an effective monitoring of output data submitted by each organisation would be undertaken. This severely limited the extent of audit testing which could be undertaken by us [the auditors]
- There was no evidence to show that Value for Money issues were taken into consideration during the lifetime of the project.
Now that the DCLG commissioners are busy trying to sort out Tower Hamlets council residents of our borough can have some hope that the incompetence detailed in the report will not happen again. Or will it?
The council has just announced it is spending £9m to buy the old Royal London Hospital in Whitechapel to turn it into ‘a new civic hub’.
The Tower Hamlets First administration states that ‘the new civic centre will be funded through efficiencies made by the council’.
Which would be quite funny if it was not so tragic.
To add insult to injury Tower Hamlets council has recently undertaken a consultation exercise to seek local residents’ views on specific savings proposals necessary due to ‘Government cuts meaning that the council must make £100 million of savings by 2018.’
Maybe one way might be to check that in future grants dished out are actually spent on what they should be spent on? Just a suggestion.
For more information: