£100k investigation into botched Cobblers loan to be published in October 'at earliest'

Auditors are looking into Northampton Borough Council's loan to Northampton Town Football Club
Auditors are looking into Northampton Borough Council's loan to Northampton Town Football Club

An auditor investigating the botched £10.25million loan to the Cobblers says he doesn’t expect his work to be finished until October or November at the earliest.

KPMG is examining the way the loan from Northampton Borough Council was handled by staff as part of its audits of the local authority.

The work is being carried out by KPMG director Andrew Cardoza, who is of no relation to the football club’s former owners who drew down the loan money – David and Anthony Cardoza.

A court judgement at the beginning of this year found that chairman David and his father had ‘failed in their fiduciary’ duties as directors of the club, and a judge ordered Anthony to repay the council £2.1million, and for David to repay the council costs associated with work that had been carried out on his home in Church Brampton.

Since then, the council has been working out its strategy behind closed doors to best recoup those sums of money. The vast majority of the remaining loan monies, which were passed on by the football club to a company called 1st Land Ltd, remains unaccounted for and is subject to an investigation by Northamptonshire Police. The sole director of 1st Land Ltd, Bushey-based businessman Howard Grossman, was banned in February from being a company director for 10 years.

Questions remain unanswered at the council however as to how the authority handled the loan and Mr Cardoza has already charged NBC £55,000 for the extra work he is carrying out on the subject. The total bill attached to his investigation is likely to top £100,000.

Speaking at an audit committee meeting last Monday (July 29), Andrew Cardoza told councillors: “There’s a value for money decision to be made by your officers as to how much you spend chasing the £10.25million. How much you get from that legal judgement will play a part in my findings.

“But you have spent a lot in terms of legal costs, but also in officer time, and these are both going to be taken into account. I have already charged you £55,000. I have had the final meeting with your previous section 151 officer [Glenn Hammons], and it has taken a lot of time to get that information.

“To complete the work I’m expecting it to be no more than an extra £50,000 on top. It was a significant issue and a significant failure in loaning money to a company that had a £7million net loss at the time.”

In January, Mr Cardoza had told the committee that he had found it difficult to get answers to questions he had sent to Mr Hammons – who is now a £90,000 per year commercial and resources executive director at nearby East Northamptonshire Council – and former leader David Mackintosh and chief executive David Kennedy.

Mr Mackintosh moved on from being the council leader to becoming MP for Northampton South, but stood down after reports that individuals linked to 1st Land Ltd had donated £30,000 to his 2015 general election fund. He has since attended a voluntary interview under caution with Northamptonshire Police.

David Kennedy stepped down from his £135,000-a-year role as chief executive of the borough council in July 2017. He has also been interviewed under caution by police.

Andrew Cardoza’s findings on behalf of KPMG will be made public, and are set to either be reported in an annual audit letter to both the authority and an objector to the council’s accounts or as a separate public interest report. Only three such reports have been published for local government bodies since April 2015, and it is likely that if such a report was issued that a special full council meeting would be held to discuss it.