Northampton Borough Council is ‘unlikely’ to recover all of the £10.25million it loaned to the Cobblers according to its chief finance officer.
The revelation, and the handling of the loan to the football club, was discussed at an audit committee meeting on Monday just days after the borough council found its civil case against former Cobblers directors Anthony and David Cardoza, and David’s wife Christina, had been successful.
Anthony was ordered to pay back £2.1million to the council, while David was told to repay the costs of work carried out on his home 'Cheriton' in Church Brampton.
Current chief finance officer Stuart McGregor told the audit committee that the Sixfields loan was ‘a reserve account issue’ that had no impact on precepts, council tax or the day-to-day revenue fund.
He added: “We don’t know what we have to write off yet because we are still going through litigation. I recognise that we are unlikely to recover all of the money, and instead of finding pounds and pennies from all over the place I need to give auditors reassurance that I may have to write some of this money off and I’m not going to allow it to be spent.”
Auditors KPMG will finally be able to sign off the council’s 2016/17 accounts after more than a year of costly delays, and the handling of the loan to the football club formed the major part in KPMG issuing an ‘adverse value for money opinion’ on the accounts.
And KPMG director Andrew Cardoza - of no relation to the former football club owners - said that he was still investigating the loan and hoped to have finalised his report within the next three months.
Asked by Councillor Brian Oldham when he could draw a curtain down on the whole issue, Andrew Cardoza replied: “Something went very badly wrong. Officers at the time and members of the time I can say, even before I have completed this report, were wrong and the information that they based these decisions on was incomplete and incorrect.
“The previous chief executive [David Kennedy], section 151 officer [Glenn Hammons] and leader [David Mackintosh] were sent questions and didn’t answer.”
The KPMG report states: “Our findings as a result of the NTFC loan and resulting internal audit report, as well as governance action plan, means we are unable to state that Northampton Borough Council had proper arrangements to ensure it took properly informed decisions and deployed resources to achieve planned and sustainable outcomes for taxpayers and local people.”
A previous internal report from KPMG back in 2016 had found that the cabinet approval of the loan ‘was based on limited information as a business case was not made available’.
And the judgement of the NBC vs Cardozas case also found: “The extent to which NBC was informed of or monitoring the progress of the works at Sixfields is unclear.”