Is this evidence of Fraud, Financial Irregularities, Non Compliance @ Folkestone & Hythe District Council?

Each year the Chairman of Folkestone & Hythe District Council Audit & Governance Committee (A&GC), must respond to the external auditors letter which asks:

‘we need to establish an understanding of the management processes in place to prevent and detect fraud and to ensure compliance with law and regulation.’

The chairman of the A&GC, is Cllr Anne Berry (pictured), first elected to district in 2011.  Cllr Berry’s allowances in 2021/22 was £6,360.

The Council’s auditor’s since 2014, has been Grant Thornton (GT).

In this year’s letter by the external auditor GT, to Charmain of the A&GC, Cllr Berry, the following is asked:

Are you aware of any instances of actual, suspected or alleged, fraud, either within the Authority as a whole or within specific departments since 1 April 2021?

The Council’s response in Cllr Berry’s name is: No.

This is not the first time the council have knowingly misled and/or omitted facts in response to GTs letter in relation to fraud, law and regulations they MUST follow by law.

In March 2022, Mr Anthony Wallner (pictured) an  Asset & Major Works Senior Lead Specialist at the Council was suspended pending the outcome of an investigation into financial irregularities of overpayments of £2.5m to Premier Roofing & Construction Ltd. We reported on this issue in our blog on the 10 May 2022. That said of the £2.5m overpayment,  £1.5m of those occurred in the financial year 2021/22 (April 1 2021 – March 31 2022).

Mr Wallner’s line manger is Roy Catling who came from
Gravesham Borough Council to be the Assets & Development Lead Specialist.

The overspend of £2.5m on a contract value at just over £473,000 has lead to two investigations, one by the Council’s HR Department, and the other by the internal auditor’s team, led by Christine Parker at the East Kent Audit Partnership, according to senior council whistleblowers.

Given this is being investigated as a possible/alleged fraud, how could Cllr Ann Berry respond with an unequivocal – NO – to GT? Was Cllr Berry kept in the dark and misled by officers?

If the response was written by a senior finance officer and legal officer: eg the s151 officer, Charlotte Spendley, or Amandeep Khroud, the Solicitor to the Council, both of whom would have seen the response, then it is more likely than not, they were aware that Mr Wallner had been suspended in early March 2022, regarding a suspected/alleged fraud to the value of £1.5 million in 2021/22, wouldn’t they?

Perhaps they didn’t want to answer in the affirmative as this might have shown that the finance department and his line manager Roy Catling, were not ‘monitoring‘ the budgets and the payments to Premier Roofing, as they allowed the payments of £1.5m, between April 1 2021 and March 31 2022, when the value of the contract was just under £500,000.

It’s clear somebody in the response to the external auditor, GT, did not tell the truth given what is set out above, and below. We very much doubt it was Cllr Ann Berry who personally responded to GT, but alas it has her name on the document. Why would the council do this to an octogenarian?

Now during 2021/22, other contracts have been awarded to council officer family members, according to claims by several senior council whistleblowers, who spoke to us on the basis of anonymity. We are currently investigating these claims.

One has to bear in mind ALL auditors, including Grant Thornton, must approach a set of accounts, including Folkestone & Hythe District Council’s with ‘professional skepticism‘. This is defined as “an attitude that includes a questioning mind, being alert to conditions that may indicate possible misstatement due to fraud or error, and a critical assessment of audit evidence.”

Alastair Clifford is an Operations Lead Specialist. He works under Andy Blaszkowicz (pictured). Andy, not Alistair, is the Corporate Director for Housing & Operations at the Council whose Salary, including fees and allowances in 2020/21 was £105,936.

Andy is Alistair’s boss. Andy & Alistair holiday together. They are friends, good friends.

Senior council whistleblowers claim Alistair Clifford’s brother won at least seven contracts – maybe more, yet only four show up on the contracts register. Alistair Clifford’s brother is based in the Maidstone area.

The value of these four contracts was £34,350 according to the council’s contracts register. According to several senior council whistleblowers, Mr Clifford’s brother, who runs Clifford Carpentry and Interiors, also undertook work on toilets in New Romney, and on the Civic Centre gardens teams office, fixing the roof for a leak, and refurbishing the office; which according to them was NOT a success.

According to the Council’s payment data, there were twenty five payments made to Alastair Clifford’s brother between 01/01/2019 and 4/11/2021, to the value of £71,795, which is twice the amount of the four contracts officially awarded.

The senior council whistleblowers claim, Alistair Clifford informed his brother how much to bid to ensure he was awarded the contracts.

Awarding contracts is governed by the Council’s Contract Standing Orders (CSOs) which state:

All contracts up to a value of £10,000 may be entered into utilising Purchase Order Terms and Conditions, unless the contract is sufficiently complex so as to require specific Terms and Conditions in its own right. Advice may be sought from Procurement and Legal Services, as appropriate.

Now it is important to realise any contract up to the value of £10,000 needs “at least one written quote in advance.”, no more.

The CSOs go onto say:

The responsibilities of Chief Officers & responsible officers

The term “Chief Officer” as used in these Contract Standing Orders means a Director, Assistant Director or Chief Service Officer, or Lead Specialist.

Alastair Clifford is an Operations Lead Specialist at Folkestone & Hythe District Council, so is clearly a responsible officer who can sign off contracts without anyone else’s say so and potentially not draw any attention to the contract.

The contracts standing orders go onto say any Chief Officer/Responsible Officer, which Mr Clifford is, should:

Immediately report any suspected or actual breach of these Contract Standing Orders to the S151 Officer and the Monitoring Officer.

Now given the value of the payments £71,795 is twice as much as the official contracts awarded £34,350, would you self report you might of broken the rules or procedures of the Contract Standing Orders?  The CSOs also say:

That all contracts of a value of £5,000 or more are included on the Council’s Contract Register;

Now it is clear only five of the payments were in excess of £5,000, according to the council’s payment data, and the other twenty were below this threshold, according to the Council’s data.

Did Mr Clifford declare it was his brother who won the contracts?

Did he bypass the council’s CSOs, and/or inform his brother of the price to  bid for the contracts, as senior council whistleblowers claim?

Did Mr Clifford lean on, or influence, the property team manager – Aarron McKinney for some of these contracts to be awarded to his brothers as senior council whistleblowers claim?

Will the Council, the internal auditor and Grant Thornton widen their investigation and include these contracts and the payments to include Alistair Clifford, as senior whistleblowers claim he also broke the CSOs, like Anthony Wallner? What do you think?

Coming back to the letter sent by the external auditor GT, to Cllr Ann Berry it asks:

Have there been any instances of non- compliance or suspected non-compliance with law and regulation since 1 April 2021?

The answer by the council, in Cllr Berry’s name, is an unequivocal – NO.

But again that can’t be right, as the law and regulations around Cllrs Register of Interests, Cllr Monk (Con), Cllr Field (Ind) & Cllr Clive Goddard, as per the Localism Act 2011, clearly demonstrate an instance of non-compliance, since 1 April 2021.

Then there is the seven years worth of Government Procurement Card (read credit card) data which has not been published in accordance with section 2 of the Local Government, Planning and Land Act 1980. This is non-compliance as they have a duty to publish this data.

And of course there are numerous contract and financial irregularities which fall under the term ‘suspected non- compliance‘ and ‘non-compliance‘, as well.

And finally, there is the non-compliance to adhere to the rules when Charlotte Spendley, the s151 Officer – who has overall responsibility for the council’s finances, released the Covid Grant data, when she should not have done so according to data protection and the CIPFA code by which she is governed.

There is more we could say, but for now will leave it there and allow you to consider whether the responses given to the external auditors were honest and true.

Is the evidence set out above, evidence of fraud, financial irregularities and non-compliance?

We’ll leave you to decide that.

Upated: June 1 2022 @18:00

The Shepway Vox Team

Dissent is NOT a Crime