Thursday 8 December 2016

Builders' cheques for over €1m not cashed by council

Minister orders wide probe into irregularities

Published 17/01/2010 | 05:00

Builders' cheques totalling more than €1m lodged with a local authority to cover planning fees and contributions were left uncashed -- some of them for so long that they went out of date.

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Now Environment Minister John Gormley is set to appoint an examiner with investigative powers to probe planning activities in a number of local authorities, including Meath County Council, where administrative irregularities involving the developers' cheques were identified

The Sunday Independent has learned that a report by consultants Mazars, into activities at Meath County Council, identified mislaid, uncashed and "bounced" cheques.

It described a regime of inadequate documentation, "lax" collection systems and deficiencies in internal controls and processes.

The report was also critical of a system where individual staff members were able to agree changes to existing payment schedules with developers without any other member of staff being involved or "signing off" on these arrangements.

More than €50,000 worth of cheques were found lying in a drawer by a staff member in the council offices -- a month after the issue was raised publicly.

In an interview with the Sunday Independent Minister Gormley said yesterday he had also received complaints about planning activities in a number of local authorities, including Meath.

"A lot of issues have been brought to my attention about a number of local authorities, about planning or financial matters. It is my intention to appoint an individual to go through the various cases. That is open to me as local government minister. The person appointed will see if there is a case to be answered. I am not in any way impugning any local authority at this stage," he said.

It is understood that the minister has asked his officials for a report on all issues that were the subject of complaints about local authorities before he decides on what action to take.

"What has to be decided, at this point, is which allegations require a full investigation by a government appointee with special powers and that is what is being teased out at the moment," the source said.

The report into Meath County Council was carried out by Mazars consultants after Fine Gael Councillor Sirena Campbell asked county manager Tom Dowling in October if he was aware of planning cheques remaining uncashed "for any considerable period of time" over the past five years.

During the course of their investigations, the consultants were made aware of cheques totalling €1,040,301, all related to planning contributions, which "remained in hand for various reasons".

There were eight developments involved and the cheques ranged in amount from €812,403 to €3,272.

The report says these cheques were loosely held on a file with few supporting documents.

Four of the developers had agreed alternative phased payments -- the total value of cheques in this category was €993,125. And cheques from three developers worth a total of €43,904 bounced. This money is still outstanding but is being pursued.

In the case of one developer, who was stated to have supplied post-dated cheques totalling €3,272, it transpired that, in fact, they were not post-dated. Staff had simply failed to lodge the cheques in time before they ran out of date "due to a lapse in the internal controls".

That money was subsequently collected.

The report is understood to recommend an improvement of the internal controls surrounding the receipting and collection of planning contributions -- to ensure accurate quantification and pursuit of outstanding balances.

But the Sunday Independent has learned that it criticises the fact that planning staff have significant discretion when negotiating the terms of phased payments with developers and recommends that a system of approval should be implemented.

They also conclude that documentation supporting amendments to specified payment terms was not adequate, nor was there any evidence of any independent sign-off of variations.

In relation to changes to agreed payment schedules, the report is understood to conclude that these were inadequately documented on files, the evidence supporting the follow up of outstanding contributions was inadequate and, from discussions with staff, the collection of contributions was lax.

During the course of their investigation, the consultants discovered that the quality of documentation on financial files was inadequate.

Particular attention was drawn to the fact that there were no summary sheets, missing correspondence and, occasionally, no documents relating to phased payment agreements.

They also found that the spreadsheets monitoring phased payments were unsophisticated considering the level of fees involved, and there were large time gaps regarding the pursuit of outstanding balances.

The Sunday Independent understands there is currently a review and restructure being carried out by Meath County Council of the internal controls over the collection, receipt and enforcement of planning contributions.

As part of the investigation, 12 specific cheques totalling €53,809 relating to planning fees that were not cashed were examined.

The largest of these cheques was for €38,000. Planning functions were being centralised from local area offices to the central offices in Navan at the time (early 2008) and that was cited by council staff as the reason these cheques remained uncashed -- due to a failure in internal controls and processes.

The cheques were eventually found in a cash box by a member of staff in October 2009.

One major recommendation is that the planning department should now take a sample of planning fees from all local area offices with a particular focus on the period of centralisation to ensure that the planning fees have been appropriately recorded and collected.

The Sunday Independent has learned that the consultants noted that it might not be possible for them to give an opinion in relation to whether or not council employees benefited from any latitude afforded to planning applicants or developers, as they did not have access to the records of the relevant parties to come to a conclusion.

They point out that, in many cases, they relied on explanations given to them without seeking to validate these with independent sources.

It is understood that the report points out it was not practicable to determine, on the basis of available information, whether or not any party other than developers/planning applicants benefited from the failure to pursue fees or contributions.

A spokesman for Meath County Council said the local authority would not comment on the report findings until the issues was discussed at the February meeting of elected representatives.

Sunday Independent

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