Fraud probe into council payment scheme

Investigation launched into a purchase card system used by council staff, reports Simon Allin, Local Democracy Reporter

credit Rupixen via Unsplash
credit Rupixen via Unsplash

An investigation is underway after cases of fraud were uncovered in a council payment scheme.

The probe has been launched into a purchase card (p-card) system used by council staff to pay for “small spend” items and as an “emergency payment method”, reports reveal.

P-cards were issued in greater numbers during the height of the Covid-19 pandemic, when buying goods and services quickly was “vital”. But an audit of 25,000 transactions covering a two-year period revealed 30% had not been reviewed by the card holder, 41% were not supported by a receipt and 65% had not been authorised by a designated supervisor.

The figures were presented to a meeting of the finance and performance scrutiny panel on Wednesday. Under questioning from councillors, Julie Barker, the council’s head of exchequer services, said an audit report had uncovered “some fraud” which is currently being investigated.

Julie told the meeting that an agreement that has to be signed by the card holder had been “boosted” to make it “very clear about disciplinary action” in the case of non-compliance or fraudulent activity. She added: “We are getting training from our fraud team to identify the areas that we should be targeting, and we are starting that process now.”

Tougher rules have since been introduced to boost compliance, while the number of cards in circulation has dropped by 44% and lower spending limits have been imposed. A “two-strike rule” means cards are suspended if there are two consecutive months of non-compliance.

This story is published by Enfield Dispatch, Enfield's free monthly newspaper and free news website. We are a not-for-profit publication, published by a small social enterprise. We have no rich backers and rely on the support of our readers. Donate or become a supporter.

Conservative panel member Julian Sampson warned that the card system makes it “really difficult” for managers to authorise “huge volumes of transactions of small amounts where the fraud will be taking place”. He added: “It is in that small boundary, under £25, that volumes of p-card expenditure are increasing year by year.”

Finance chief Fay Hammond insisted that people using the cards were “trusted officers” and that cases of fraud were “rare”. James Newman, the council’s director of corporate finance, added that it was “conventional” for local authorities to use p-cards.

Conservative opposition leader Alessandro Georgiou claimed the problems would not have arisen in the private sector. He added that it was “bonkers” that 65% of transactions had not been authorised, and he was keen for that to be investigated to uncover “bad behaviour”.

Julie admitted that the council had “probably not” reviewed every unauthorised transaction but added that some had been retrospectively approved. However, she was unable to say whether all of the 25,000 transactions would be investigated, and Cllr Georgiou called for the matter to be brought back to the scrutiny panel with an answer from the counter-fraud team.

Under further questioning from panel members, officers said they were looking to improve the compliance system and were considering alternatives to the p-cards.

We know times are hard

If you are struggling to make ends meet, we are keeping Enfield Dispatch free because of you. We know that many people cannot afford to pay for local news, so this website and our print paper will always be free. If you can afford to, and value what we do, a small monthly, yearly or one-off contribution can support us to keep providing quality journalism for Enfield to our community for free.

Monthly direct debit 

Annual direct debit

£5 per month supporters get a digital copy of each month’s paper before anyone else, £10 per month supporters get a digital copy of each month’s paper before anyone else and a print copy posted to them each month. £50 annual supporters get a digital copy of each month's paper before anyone else.  

Donate now with Pay Pal

More information on supporting us monthly or yearly 

More Information about donations