17 November 2005 | Rebecca Ellinor
Purchasers at Lambeth Council are under investigation along with housing and finance colleagues following a £2.8 million alleged fraud.
It follows the launch of a police inquiry and an independent disciplinary probe into how a former employee allegedly managed to process purchase orders for central heating equipment from a firm in which he had an interest.
Alex Watson Jones, a former project manager at the authority, is alleged to have committed the fraud by requesting one cheque and three bank transfers. In a council statement, deputy leader John Whelan said: "This is not an episode anyone can be proud of."
It comes only months after figures released by the Office of the Deputy Prime Minister showed Lambeth in the top four performing authorities for procurement efficiency savings, having made £1.7 million, of which £1.4 million was cashable, in 2004/05.
Lambeth has appointed Bill Roots, former chief executive of Westminster City Council, to lead the independent inquiry. He is to examine the actions of individual staff and teams during the period of the alleged fraud.
A spokesman told SM
: "A number of staff are being interviewed as part of the internal investigation process, including procurement staff. However it is chiefly a housing/finance matter."
The council refused to divulge the extent to which procurement was involved or its role in compliance. However, it has confirmed that a review of conformity with financial procedures has revealed "areas that need strengthening", and a retraining programme for all managers on finance procedures is under way.
David Pointon, head of procurement at Portsmouth City Council and chairman of the Society of Procurement Officers in Local Government, said: "Unless there are controls someone will probably try to do something: this is where good procurement practice comes in. "The strategic management of the procurement function should be aware and monitoring the potential for misuse."
Michael Levi, a professor of criminology at Cardiff University, added: "Check if a company you're dealing with is genuine or owned by the people doing the orders. Look at when it was set up and for evidence of it trading, particularly when it involves large sums. It's critical there's some discipline in the ordering process.
"This might be a systemic failure or people not doing the job they're supposed to do."