The former chief finance officer of Northampton Borough Council has been heavily criticised by auditors after lengthy delays in signing off the authority’s 2016/17 accounts.
Glenn Hammons was the previous chief finance officer, also known as a section 151 officer, at the borough council having been employed by the county council through LGSS during his time in the position.
Mr Hammons is currently a commercial and resources executive director at East Northamptonshire Council, earning almost £90,000. But it his past performance in Northampton that was subject to strong words from auditors KPMG and its director Andrew Cardoza.
The 16/17 statement of accounts were delayed after an incorrect formula was used to process property values by an external valuer. KPMG says that by using an ‘incorrect’ social housing discount factor, the authority understated the value of its council dwellings by £million.
Staff churn and the resultant loss of knowledge from the council was also blamed for the delays, as interim agency staff were then used to progress the accounts.
A final deadline of August 2018 was comfortably missed, and the resultant delays have meant the original £80,000 cost of the audit has soared to what will be more than £300,000 when they are eventually signed off at the end of the month.
But it is Mr Hammons, who left his position at the county council and LGSS in February 2018, who bore the brunt of the frustrations from Mr Cardoza.
He said: “This has been far too long coming, and there are a huge number of lessons to be learned. The interim staff didn’t really own what they were producing and the previous section 151 officer wasn’t looking through the stuff that was coming in.
“It’s not normal, it’s not acceptable and it should never have happened. The delays have ended up with us working ridiculous hours and the borough council team working ridiculous hours. We’ve had teams emailing each other at midnight, and that’s not good for anyone.”
The incorrect use of the valuation formula and the handover from Mr Hammons to his successor Stuart McGregor were also highlighted as frustrating moments for Mr Cardoza.
Councillor Danielle Stone asked what lessons had been learned from the saga, while Councillor Mary Markham said the council was now on the ‘naughty step’ as 44 changes had been made to the original statement of accounts.
Mr Cardoza replied: “This discount factor is normally a tick, but when we asked about it they gave rubbish answers. They had no idea what a social discount factor was. Our officers found it farcical, there’s no other way to put it.
“We have 12 recommendations in detail. Most have already been discussed and all of them have been accepted by officers.
“There are very large numbers that need not have been there if the previous section 151 officer had checked some of these things. There was also an inadequate handover from the previous section 151 officer to the current one, so it’s not a surprise.”
The KPMG report highlights how the authority didn’t know that the external valuers Bruton Knowles had used the social discount factor for the South East instead of the East Midlands, and was not aware that the value itself had changed.
It states that there was ‘no overall strategic ownership by an appropriately experienced individual’, and that the valuation process in 16/17 appeared to have been done on an ‘ad hoc basis, with no written process notes’.
One of the 12 KPMG recommendations is to formulate ‘a formal policy and process for valuations’, and that written rather than verbal instructions should always be given to external valuers.
Mr Cardoza also had stern words for former chief executive David Kennedy and council leader David Mackintosh, saying he had found it difficult to get answers to questions he had sent to the duo as well as Mr Hammons regarding the £10.25million loan to Northampton Town Football Club.
Mr Hammons was ‘closely involved in all financial matters relating to the development of Sixfields and the adjoining land, including the loans’ according to a recent court judgement where former directors of the Cobblers were ordered to compensate the borough council.
The civil trial, held last summer, also heard how Mr Hammons had failed to declare hospitality of free tickets to a Tottenham Hotspur game, and a meal, from the owner of the development company into which a significant amount of the loan money had been deposited.
The Sixfields loan was the prime reason that the auditors issued an ‘adverse value for money opinion’ on the 16/17 accounts.
Mr Cardoza told members of the audit committee on Monday evening (January 28): “You were never not going to get anything else for losing £10.25million. But it’s not just the loss of money. You are spending money and officer time on seeking that money back, which is the right thing to do. But at what point do you decide that you are going to write it off? I wouldn’t hold my breath that you will get out of adverse value for money opinion for 2017/18.”
Stuart McGregor had earlier told the meeting that the council was 'unlikely' to recover the full £10.25million.
Speaking to the Local Democracy Reporting Service after the meeting, Councillor Stone - who is Labour leader as well as a member of the audit committee - said: “The problems were down to the loss of staff, and we kept raising questions about it. We were using external agencies who didn’t know about Northampton, didn’t do research and made wrong decisions. It’s absolutely awful.
“There was clearly wrong decisions made on the football club as well. These officers were supposed to be protecting the public.”