Another financial irregularity at the council

Folkestone & Hythe District Council’s constitution  describes how they operate, makes sure they perform well, and are transparent.

The constitution is the responsibility of the monitoring officer, and solicitor to the council, Amandeep Khroud (pictured).

The constitution is a legal document and the legal framework for how the council MUST abide by the law and regulations.

Part 10 of the constitution set out the rules governing the financial procedure rules, contract standard orders and auditing of the council. At part 10/16 it sets out  Financial Regulation F, the virement policy.

Before we proceed one must understand what a ‘virement’ is.

Put simply a virement is the transfer of a surplus from one budget account to cover a deficit in another. So an example would be to imagine you are doing up your kitchen and bathroom at the same time.  Your budget for the kitchen is £5,000, and for the bathroom is £2,500. Your kitchen cost you £4,000, leaving an excess of £1,000. However, your bathroom has cost £3,500. The £1,000 you have left over from the kitchen can be transferred to your bathroom. That is a virement, as it is covering the deficit in the cost of your bathroom.

At part 10/17 of the constitution it sets out the Virement authorisation limits. It states:

11.2.2 Chief officers can (subject to the conditions below) vire funds, within a budget heading, up to a limit of £20,000.

11.2.3 Chief Officers can (subject to the conditions below) vire funds across budget headings, for which they are responsible, for of up to £20,000.

11.2.4 The Head of Paid Service, in consultation with the Corporate Leadership Team, can (subject to the conditions below) authorise any transfer between budget headings of up to £15,000.

11.2.5 Cabinet approval should be sought for all virements which are in excess of £25,000.

11.2.6 Full Council approval shall be sought for all virements which are outside the Budget and Policy Framework.

11.2.7 All virements will be reported, retrospectively, to Cabinet, as part of the Council’s budget monitoring procedures.

There is a problem with the constitution, that being, nobody in the council  can vire (transfer) any amount between £20,001 and £24,999. If any amounts between £20,001 and £24,999 have been vired (transferred) the chief officers would have breached the law, the council’s financial regulations, and the constitution.

Now of course, the council are not openly going to admit they have transferred these amounts between their budgets, because  that would be tantamount to owning up to breaking the law. And given the track record of the council’s lack of transparency, we honestly doubt, they’ll come out and say they’ve done something wrong.

What this constitutional ‘irregularity’ shows is the Solicitor to the Council, Amaneep Khroud, who is paid handsomely, appears to be incompetent at doing her job and may have been promoted to her level of incompetence. It also shows nobody in the finance team, headed up by Charlotte Spendley (pictured) has noticed this ‘irregularity‘.

Given there is a council wide look at contractual and financial irregularities, as mentioned by Charlotte Spendley at the Audit & Governance Committee, held on 08.06.22, lets hope those charged with these investigations, will flag the glaring irregularity we have highlighted and ensure the constitution is amended as soon as possible.

The Shepway Vox Team

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