ANDOVER town council has been reported to the borough council’s chief financial officer for “financial mismanagement” by one of its own members, the Advertiser can reveal.
Cllr David Coole has sent a report to Test Valley Borough Council (TVBC) Section 151 officer (also known as chief financial officer), as well as the town council’s own internal and external auditors, accusing the authority of “ "failing to approve a Balanced Budget, for False Accounting and for serious mismanagement of its Financial Reserves and its Balanced Budget setting process".
It comes following the town council’s meeting on Tuesday, January 25, in which it agreed its 2022/23 budget and precept.
An alternative budget had been proposed by Cllr Coole, which he claimed would not only be “balanced”, but also reduce spending, allowing the precept to be reduced by more than £4 for a Band D household.
However, decisions taken over earmarked reserves and staffing costs prior to budget debate rendered the alternative redundant, and the budget as recommended by officers was approved by seven votes to four, with one abstention.
READ MORE: Precept frozen as town council budget passes
On Thursday, January 27, Cllr Coole told the Advertiser that he had lodged a report requesting further investigation into the legality of the budget passed.
He said: “The Town Clerk and certain Members seem to be in denial that the council has failed to satisfy its legal Balanced Budget setting requirements and believe it is not doing anything wrong.
“Not only has the council denied its residents the potential of a precept reduction of £4.54 for a Band D property, the council has also approved an unbalanced 2022/23 Budget. It now has a financial black hole of some £143,000 in its combined Financial Reserves, because it lacks the funds in its bank accounts to satisfy this shortfall. The council is now having to double count its future income.”
Expanding on how he has come to this conclusion, he continued: “The future income from the precept and allotments rent, which is for planned expenditure during 2022/23, will be double counted to cover both the planned expenditure and the financial shortfall in its combined Reserves Liabilities. This is False Accounting, is contrary to the council's Financial Reserves Policy and should never have been allowed to happen.”
He continued: “There are serious discrepancies and issues regarding the presentation, control and management of the council's Earmarked Reserves, Operational Reserves and Community Infrastructure Levy Reserves, which has put the council at unnecessary financial risk. For the last two months, council members were presented with confusing and conflicting financial reports, from which they were legally required to consider and approve a 2022/23 Balanced Budget. At the January 25 2022 Full Council meeting, members were prevented from considering and debating all the Financial Reserves and discrepancies, which is essential for setting a Balanced Budget. It is no wonder the council failed to approve a Balanced Budget and that some members admitted they did not understand what was going on.
“Whilst I do not believe any fraudulent activity has taken place, the potential for such activity exists because of the serious mismanagement, lack of control and compliance with the council's Financial Reserves Policy.”
SEE ALSO: Recap: Updates at full council as ATC to set 2022/23 budget
Responding to the news, Wendy Coulter, ATC clerk, said: “The Town Council has produced a balanced Revenue Budget for 2022/2023. The Town Council has followed its procedures as it has done since it was formed 2010. It has been through Internal and External Audit each year since 2010 and has never had an issue raised about a balanced budget.
“The Town Council will await the result of any investigation.”
A TVBC spokesperson added: “We have received correspondence but it remains to be seen what, if any, role there is for Test Valley Borough Council in relation to the matter.”
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