There has been a ‘significant lack of financial control’ over the use of company credit cards at Northamptonshire County Council, according to the authority’s auditor.
As the council was heading for the worst financial crisis in its history, staff at the authority spent more than £500,000 on plastic in the past 12 months, with many transactions not reviewed or approved.
The cards were used at a number of high street and online retailers including Amazon, Argos, Tesco and DFS.
The council’s auditor KPMG records that there has been some ‘questionable expenditure’ and has now declared that a number of transactions need to be looked at further.
These include an £741.95 Apple Iphone bought from Currys in May 2017 as well as a tablet and television bought from the same retailer and a £22.50 spend on cosmetics that was categorised under catering expenses.
The cards are known in local authority circles as ‘government procurement cards’ and it is common practice for council staff to use them to make business purchases.
However KPMG has decided to bring the spending under the microscope in light of the council’s financial situation.
In its interim audit report KPMG, which has forensically analysed the council’s current financial situation, said: “Our review of the transactions in year indicate there have been repeated purchases, particularly at high street stores.
“It is unclear why the use of GPCs on these repeated purchases were deemed necessary given the potential benefits of procuring within a framework.”
592 stationery purchases totalling £66,213 were made with a company called CommercialNCC and a further 540 transactions were made with Banner Group Ltd.
None of these purchases were reviewed or approved.
Altogether in the 2017/18 financial year £584,065 was spent on the Royal Bank of Scotland credits cards which were issued by LGSS, the council’s business support provider which NCC co-owns with Cambridgeshire County Council and Milton Keynes Council.
According to information supplied to KPMG, £412,384 of transactions were not approved, which makes up 80 per cent of the total spend.
Labour’s Cllr Mick Scrimshaw, who represents Kettering’s Northall ward on the county council, said: “This is clearly a cause of great concern and I am thankful that the auditors have picked this matter up.
“You wouldn’t expect staff to be spending large sums on stationery, as surely there is a procurement process for this.”
A Northamptonshire County Council spokesman said: “KPMG are commissioned as our auditors to carry out robust and impartial analysis of our finances and governance on an ongoing basis.
“Their reports, as well as the findings of the Government’s Best Value inspection, have helped to inform our improvement programme to address previously-highlighted issues with the council’s financial management and governance.
“Among the improvements already implemented, a new review process for expenditure has been introduced and all spend above £1,000 must now be approved by the Chief Executive Approval Panel to ensure that the expenditure is necessary, delivers best value for money and helps to achieve the council’s objectives.
“The Government-appointed commissioners are now working with us to continue to improve our finance and governance processes to ensure they are as robust and transparent as possible.”
The KPMG report, which will be discussed by councillors at the audit and governance meeting today (Thursday), does not indicate how many members of NCC staff had access to credit cards.