Croydon Council has been criticised for having little to no controls in place to prevent fraudulent staff expense and mileage claims with employees submitting questionable claims for biscuits, birthday cakes and balloons.
The council’s systems were so weak, said auditors Mazars in the internal audit, that there was a ‘high risk’ of abuse resulting in financial loss and or reputational damage with it recommending immediate management action.
Auditors tested a sample of 20 approved expenses claims and found in a quarter of cases expenses were incorrectly categorised and, in some instances, should not have been claimed at all.
The review identified that some of the expenses had been paid to staff in ‘contravention’ of the council’s expenses policy and these ‘misreprensentations’ could have resulted in disciplinary action or the sack.
Among a sample reviewed by Mazars they found an emergency housing interventions officer had billed the council for £143.48, which included two birthday cakes costing £29.98 and £40 for event balloons; while a democratic services officer had claimed for £45.10 which included chocolate biscuits from Sainsbury’s for £3.90 and £22.60 of food from Stuffins.
The expenses which would have been signed off by a manager were also wrongly categorised and claimed as being expenses for ‘taxis’.
Staff were required to acknowledge that they had read and understood the council’s expense policy before submitting the claims, said the report.
There were also examples where officers had incorrectly claimed goods for services and service users as business expenses instead of claiming using the council’s ad hoc payment process.
These included £302.40 for trampolining tickets for young people’; £141.94 for the purchase of tokens and snacks for SummerMix, a summer school for refugees and unaccompanied minors;£73.60 for wine for a Good Employer event and £73.59 for food items for a summer garden party.
During 1 April to 18 October 2019 £163,342.98 expense and mileage claims were made by council staff. Mileage claims were also submitted without supporting documentation and in one instance over £800 was claimed for ‘inspections’ incurred on one day.
The claims also included hundreds of pounds spent by council officers on subscriptions and professional membership accreditations which were categorised as claims for ‘medical’, ‘use of public transport’ and ‘overnight’.
One project officer in Placemaking billed the council for £339 for their chartered membership to the Landscape Institute describing it as ‘medical fees’ even though it is against the expenses policy for the council to pay these fees.
The review was published in February prior to the pandemic and pre-empted the financial crisis which has resulted in the council going bankrupt but gives an indication that fundamental weaknesses already existed.
An examination of a sample of 20 overtime payments also identified abuse of protocols with two instances where the hours paid did not reconcile to the claim forms and another two where copies of the claim forms were not available.
The Council’s executive leadership team was briefed about the issues raised in the report and a working group set up to review the policy and guidance issued to staff