'Procurement errors' led to Lambeth's alleged fraud

16 February 2006
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16 February 2006 | Rebecca Ellinor

Errors and omissions at Lambeth council allowed an alleged procurement fraud of £2.8 million to go ahead.

That is the conclusion of an internal control review conducted by the authority's auditors PricewaterhouseCoopers.

As reported by SM (News, 17 November 2005) purchasers, finance and housing staff were investigated after a former employee allegedly managed to process purchase orders for central heating equipment from a firm in which he had an interest.

A police inquiry was launched, together with an independent disciplinary probe into the incident. PricewaterhouseCoopers simultaneously held an internal audit which has now concluded.

A council document into the matter reveals the PwC review found that there were "inadequate reference checks and errors and omissions in relation to procurement, contract monitoring and the authorisation of payments".

It said all major contract awards in housing now need the endorsement of the department's commissioning team before they can be approved. Retraining programmes on finance procedures for all managers are continuing. This includes a course entitled 'managing avoidable losses' which has been adapted to focus particularly on major procurement.

The independent inquiry led by the former chief executive of Westminster City Council, Bill Roots, set up to examine the actions of staff has now also concluded and, as a result, four employees have been suspended pending possible disciplinary action.

Police are still investigating the case of Alex Watson Jones, the former project manager at the authority, who is alleged to have committed the fraud.

The council is now trying to recover the money lost in the incident through a civil action.


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