Agenda item

To receive any questions relating to items on the Agenda from members of the public and replies thereto.

The following questions were asked during Public Question Time:

 

Barry Warren Council Tax Payer. Former Leader of Council for a short while.

 

My questions relate to Agenda Item 12 starting on page 83 of the bundle.

 

My questions are mainly directed to the Devon Audit Partnership Officers please.

 

1.         On the third line of the introduction you report ‘We agreed the review would include’.  Who were ‘WE’ please? 

 

2.         Was I consulted on the Terms of Reference?

 

3.         On 16^th February 2023 did Mr Middlemass write an email to the S151 Officer, Mr Jarrett, as the result of the then Leader, Councillor Deed, raising concerning issues? 

 

4.         In that email were the words “I envisage we do a quick piece of work to help allay some basic concerns related to the payment of funds from MDDC to 3 Rivers” and “I suggest we meet to discuss the terms of reference for our work in the next few days.”

 

5.         Does that give confidence that a thorough independent review of concerns is going to be carried out?

 

6.         At the bottom of page 85 you refer to advice given. Do you have evidence that I received such advice as I have no recollection?

 

7.         In relation to the matter referred to on page 89 reference is made to information given by the Managing Director of 3 Rivers and the S151 Officer – a former Director of 3 Rivers.  Did you enquire of anyone else as I and others received a totally different explanation at the time of a Director giving permission for the bricks to be borrowed?

 

8.         Were you told that I had reported to the Chief Executive my witnessing a tradesman attempting to purchase materials through the 3 Rivers account?

 

9.         On page 90 reference is made to the resignation of the 3 Rivers Financial Director.  Did the investigations reveal the email from that Director to a number of people dated 31^st January 2023 in which he set out a lot of detail and then wrote “All of this places me in the position that I have to resign as a Director of 3 Rivers Developments Limited and St George's Court (Tiverton) Management Limited. I will lodge the resignations promptly at Companies House. I will also advise Simpkin Edwards, Hall & Scott, Absolute PR and Paul Steele Accountants of my resignation.”

 

In response, the Chairman stated that none of the Members of the new Committee were qualified to answer the questions, he therefore asked if any of the officers could? Mr Tony Rose from the Devon Audit Partnership (DAP), stated that he would like to check what had been said against the records held by Paul Middlemass, the Audit Manager. Much was down to interpretation. If there was more evidence available regarding the statements already made then DAP needed to have sight of that. Certain comments made had, in his view, been taken out of context. The fraud allegations had been investigated based upon the evidence available at the time. DAP would be happy to look into this further if new evidence was available.

 

The Chairman stated that that was as far as his Committee could go but answers would be arranged from the sources that had been mentioned.

 

Paul Elstone (a local resident)

 

My questions relate to agenda items 11 and 12. - Devon Audit Partnership -  DAP’s  Internal Audit 2022/23  and the Investigation of 3 Rivers.

 

QUESTION 1:

In an email to DAP dated 24^th May 2023, I stated that there was one allegation of fraud and four allegations of unethical conduct that warranted investigation. Will DAP explain why they did not investigate the fraud allegation actually made, or the ethical conduct allegations?

 

QUESTION 2.

After a request by DAP to provide evidence. This in respect of the fraud allegation, I stated the following: “I have been blocked by MDDC Officers in getting a copy of the Viability Assessments in question despite I believe having a legal right as defined in a 2020 High Court Judgement”.

Why is this not mentioned in the DAP Report?  

Why did DAP not follow up on this?

 

QUESTION 3

Page 13 of the report references a former and long-standing Council Leader saying, “The public do not know the Machiavellian things that have gone on from a finance point of view”.

Why was this statement not investigated in any way by DAP?

 

QUESTION 4

Were DAP, or for that matter Grant Thornton made aware, by the MDDC Monitoring Officer or others,  that in an email dated the 25^th January 2023,    the  3 Rivers Finance Director raised serious concerns with MDDC Officers about MDDC under reporting the level of 3 Rivers bad debt in its accounts?

 

QUESTION 5

Were DAP made aware by the MDDC Monitoring Officer or others that in the  3 Rivers Finance Directors resignation email dated 31^st January 2023 he states Quote “I do not accept his response. I have sought legal advice regarding possible defamation” unquote, this was said in response to the MDDC Officers reply in respect of MDDC’s failure to properly report the level of 3 Rivers bad debt ?   

 

QUESTION 6

Given the information now at hand, including from previous Leaders of this Council, will this Audit Committee now recommend to Full Council that the DAP Internal Audit plus the Fraud Investigation Report be rejected ?

That another, more wide-ranging, investigation be implemented?

 

Mr Ken Johnson, also from DAP and a fraud investigator, asked the questioner to let him know if he had any further information that pointed to a criminal offence.

 

The Chairman asked that the senior officers and DAP liaise over the questions raised and if there was any necessity to take any further action then this would happen and a reply given in due course He reiterated the fact that his Committee was new and ‘this was all they could do’. 

 

Nick Quinn Local Resident

 

My first question relates to Agenda Item 12 – The DAP 3 Rivers Report.

 

It is apparent from how the ‘Removal of Materials' allegation has been treated, that this is a quick ‘skate over’ report.

 

The report confirms there was unauthorised removal of materials from the St George's site, which was reported to the S151 Officer and to the Board of 3 Rivers.

 

However, DAP accepted the Managing Director’s explanation, as fact - without seeing any evidence of an investigation or action.

 

This proven lack of proper procedures and management control at 3 Rivers should have raised questions: “was this an isolated incident?”, or “what else has happened that has not been recorded?”.

 

The report shows the allegation was true and that 3 Rivers’ management practices are flawed - a combination that should merit further investigation.

 

Question 1: With the admission that materials were removed from St Georges Court and a proven lack of proper management control or records, will this Committee ask for a proper investigation into this matter?

 

My last question relates to Agenda Item 15 – Grant Thornton’s Annual Report

 

This report contains a number of comments concerning the problems of 3 Rivers but the worst of these are aimed at Elected Members of this Council.

 

The Executive Summary states: “we observed the emerging escalation of ineffective decision making in respect of the process for approving the 2023/24 business plan of 3 Rivers” and this “raised concerns about the Council’s ability to take timely decisions in the best interests of the Council”.

 

I believe these critical comments are misdirected.

 

Given the risks associated with the very late, and obviously poor, Business Plans; the escalating losses and likely loan impairments - Elected Members, including this Audit Committee, made positive decisions not to support any of the Business Plans presented to them.

 

Question 2: Will this Committee seek, from Grant Thornton, a Full Explanation for the critical comments regarding Elected Member decisions, contained in this report?

 

Mr Johnson (DAP) stated that he had obtained no evidence of criminality despite the comments made and reiterated his advice to the questioner that if he suspected criminal activity it should be reported to Devon and Cornwall Police

 

The Chairman reiterated the point that if anybody had any direct evidence they should take it to the official Police investigators as they were responsible for looking at criminality and further suggested that perhaps in future this is where any allegations should go. He again asked that senior officers liaise with DAP over any questions raised.

 

Note: Copies of the public questions would be sent to DAP in order for any that had not been answered during the meeting to be addressed and clarity given.