Town council made decisions "without due consideration of legal powers": auditors

Poor governance led to a town council making decisions without due consideration of its legal powers and taking actions that might be unlawful, a report in the public interest has found.

The report by auditors at PKF Littlejohn said they had found a number of significant weaknesses in Keighley Town Council’s governance.

The focus of many of the weaknesses was the decision by the council “to embark upon an ambitious project to develop a civic centre, the poor financial performance of the centre and the resulting substantial increase in the council’s 2013/14 precept”.

PKF Littlejohn also said:

• The annual governance statement was a key means by which the council was accountable to the public. To the extent that the council had made unfounded assertions in its annual governance statement for the year ended 31 March 2013, that accountability had been significantly undermined. “In particular the confirmations given were made without sufficient enquiry to ascertain whether the councillors could reasonably give such confirmations.”
• They were concerned the council had “failed to establish and secure the standards of governance and accountability in many areas that electors have the right to expect”.

The auditors were however encouraged by the council’s initial and positive response to an earlier draft of the report.

“The council accepts some of the objections raised and has indicated its willingness to address many of the identified areas of weakness,” the report said.

Recommendations made by PKF Littlejohn for corrective action to be taken “as a matter of urgency” included the council ensuring that it is properly supported with external legal advice where appropriate, “in particular to include the powers on which it is relying when making non-routine decisions”.

PKF Littlejohn said the council should reconsider the powers on which it is relying where the auditors had identified concerns over decisions the council had made which have an ongoing impact, “in particular in respect of the trading at the civic centre and its impact on the level of precept, taking external legal advice where appropriate”.

The report also called for:

• The commissioning of a thorough review of the council’s governance arrangements;
• A review of the council’s asset register to ensure it contains a comprehensive record of all fixed assets owned by the council;
• Ensuring members have sufficient opportunity to consider the accounting statements prior to the meeting at which they are approved;
• A review of the council’s arrangements for identifying and considering the risks associated with significant future major financial commitments;
• The establishment of revised arrangements for allowing the public to exercise their rights to inspect the council’s accounts and supporting records.

A copy of the public interest report can be viewed here.