No smoking gun but still lots of questions

Cornwall Council has got through the first working day of the Daily Telegraph's "spending card scandal" relatively unscathed.

Silk ties - nailed at 7am. £1,080 on Rick Stein's restuarant? It wasn't for food or drink, but payment for a Future Jobs Fund project recouped from the Department of Work & Pensions. The One Eyed Cat restaurant bill for £1,269? A lunch for 43 people as part of a European Union project about higher education, recouped in its entirety from the EU.

So here are a few more items which, on the face of it, merit further inquiry:

* £2,425.20 on mobile phone socks
* £1,260 for a senior official and two councillors to stay at the Palace Hotel
* Several hundred pounds in various pubs
* Two nights accommodation at the Alveston House Hotel for two people, at £90pppn, totals £360 - yet the bill was for £540. So what was the £180 "extras" and what was the purpose of the stay?
* £500 bills at Sainsbury's supermarkets

I've just emailed a few dozen questions of this nature and look forward to the answers in a few days. There may well be perfectly acceptable explanations, although on the face of it a £3,000+ return taxi ride to Bolton will take quite a bit of explaining (did they go via New York?)

I'm keen to clarify the council's policy on alcohol and whether these cards can be used this way - it seems it might be OK to have "some" alcohol with a meal, but no-one seems to know how much "some" actually is.

I've also asked the council to clarify its spending on consultants. The data for 2010-11 should now be available so that we can make valid year-on-year comparisons.

One area where the council is clearly struggling is the way it handles information - a Freedom of Information request which contained serious errors, as well as breaching data protection laws, was sent to a national newspaper without being checked. As usual, the cock-up theory of history appears to be winning over the conspiracy theory - but that's probably no cause for celebration.

Cornwall Council's latest statement on spending cards

Just surfaced on Twitter:

"Cornwall Council has not spent £9 million on credit cards as suggested by recent media reports.


"The Council does not use credit cards as local authorities are not allowed to have credit. The payments were made using payment cards which work in a similar way to debit cards.

"The Council has also not spent millions of pounds on foreign travel and meals. The figures provided in the FOI response to Daily Telegraph had not been converted from the original currencies - producing a misleadingly high figure. The suggestion, therefore, that we spent £114,142 for hotel costs in India for an educational exchange involving teachers from Cornish schools was not true. This amount was actually in Indian Rupees and would have been £1,645 in UK currency.

"There are similar inaccuracies in the amounts highlighted for restaurant payments - with one figure of £15,640 quoted for a restaurant in Japan during another educational exchange. This amount is in Japanese Yen and would be £118 in UK currency.

"These payment cards were originally introduced by the Government as they are a cheaper and more efficient way of paying for goods and services - saving an average of £33 per transaction. The system is also popular with suppliers are it is much faster than submitting invoices to the Council.

"The Council currently has 509 cards in use of which 154 are allocated to schools and there are very strict financial controls in place to regulate their use. Individual cards have a maximum limit on them - usually around £1,000 - with any payment about this limit having to be authorised by a senior member of staff."

Five hours in cardland

At 7am this morning Cornwall Council's Director of Corporate Resources, Michael Crich, told BBC Radio Cornwall the council had issued "about 1,000" spending cards. By 12 noon this figure had dropped to "about 600."

At 7am Michael said the cards' spending limits "starts at around £1,000." By 12 noon the figure started at £500.

Four days after the Daily Telegraph broke the story, and asked by Laurence Reed about the council's policy on buying alcohol: "I'm not sure."

Anyone hoping for a swift end to this story is likely to be disappointed.

STOP PRESS: 2.45pm. Council now says a total of 509 spending cards, of which 154 are issued to schools.

STOP STOP PRESS: 3.15pm Council now again says spending limit on cards is "usually around £1,000."

Anyone feeling confident yet?

Peeling the onion

First of all my thanks to Cornwall Council leader Alec Robertson and the Corporate Director for Resources, Michael Crich, for coming on BBC Radio Cornwall at 7am this morning. Some fascinating detail about the Daily Telegraph's credit card story is now starting to emerge.

Michael told us that there are about 1,000 of these cards in circulation and none has a spending limit of less than £1,000. For an organisation with a total headcount of around 19,000, the next question is about how the cards are distributed.

Clearly the council itself is still struggling to find out what's been going on - Alec said he is among those who wants answers about apparently extravagant restaurant bills and luxury hotels. At least the question of the £1,000 on silk ties appears to have been sorted. Alec said these were council ties, purchased with a view to selling them on to members. If this answer had been supplied to the Daily Telegraph on Friday, then that's one part of the media firestorm which would never have started.

Alec's assertion that no money at all had been spent on "credit" cards - because these are government-backed "spending cards" - is perhaps a bit flimsy. Goods and services were still supplied on credit, but there was no risk of interest charges. But again, councillors will want to know why this informaton had not been available to the Telegraph by Friday.

This story will run for as long as there is detail that needs explanation. For example, on 24th August 2010 the council spent £1,269 at the One Eyed Cat restaurant in Truro. Who was there, and why? What did they eat? And even more importantly, what did they drink? The charge is coded to the council's legal department.

I was interested to hear Michael defend the council's finance department in relation to last week's story about spending on consultants. He said no-one had made any mistakes. Perhaps he hasn't read the council's statement, issued on Thursday:

"it appears that some of the payments made to contractors for large capital projects such as new school buildings and roads have been wrongly allocated to the consultants budget."

So which is right - last week's statement or this morning's? If there were no coding errors, does that mean that spending on consultants and agency staff really was £10m in just three months?

Rarely will there have been as much interest as there's likely to be in Thursday's gathering of the Corporate Resources Oversight & Scrutiny Committee.

Calling all bean counters

CardPaymentsover500.xls

If I've managed the technical stuff properly, you should be able to open this Excel file and read for yourself the details of Cornwall Council's credit card spending.

I suspect that once the dust has settled, and everything is in the same currency, it will be expenditure on restaurants and hotels for staff and Cabinet members rather than computer games (possibly for children's homes?) which will take the most explaining. But I'd be grateful if eagle-eyed readers would comment with anything they think looks particularly dodgy.

Meanwhile I'm wearing myself out thinking up new questions: how many credit cards has the council issued, and to whom? Who signs off on them? Why are some utility bills settled this way, rather than (the usually cost-saving) direct debit?

I'm particularly curious to know how many staff have been lost from the finance department in the past two years? In the long run, good accountants save you more than they cost.

(Cornwall Council told me this afternoon that its own original Excel file, which the council itself issued to the Daily Telegraph last week, contained confidential details of some court cases which potentially identify vulnerable children. I therefore agreed to the council's request to take down the spreadsheet while the council redacted this information and supplied me with a "clean" version - hopefully in all the correct currencies - and which does not breach any court orders. I'm still waiting for the council version, but have myself edited out all details of where the cards were used in court cases. I will post the council's spreadsheet when it finally arrives.)

How the Council whacked it on the plastic

This just in from County Hall:

"Cornwall Council is the largest unitary council and one of the largest local authorities in the country with an annual budget of more than £1.2 billion. Using credit cards is an efficient and transparent method of payment and is standard practice in both the public and private sectors. While we accept that the figure quoted in the Daily Telegraph article for credit card spending appears high, it is important to recognise that the Council's overall budget for this same three year period was over £3.5 billion.

"We have also disputed the accuracy of some of the figures quoted by the Daily Telegraph. One of the largest areas of spending highlighted in the article was for hotels and travel. Unfortunately the figures quoted in the article have not been converted from the original currencies - producing a misleadingly high figure. One example of this is a figure of £114,142 for hotel costs in India for an educational exchange involving teachers from Cornish schools. This amount was actually in Indian Rupees and would have been £1,645 in UK currency. There are similar inaccuracies in the amounts highlighted for restaurant payments - with one figure of £15,640 quoted for a restaurant in Japan during another educational exchange. This amount is in Japanese Jen and would be £118 in UK currency. We are still checking these figures but so far estimate that at least £1.3 million of the costs highlighted for overseas travel and hotels are wrong.

"Cornwall Council is committed to achieving the best possible value for money for council tax payers in Cornwall" said Council Leader Alec Robertson. "All spending, including credit card spending, is very closely monitored and strict financial controls are in place.

"However, while we are committed to being open and transparent, this incident shows the importance of analysing raw data carefully and responsibly. Unfortunately the deadline set by the newspaper meant that we were unable to check all the figures before the article was published. We are disappointed that, having told the journalist that the information was inaccurate, they did not give us the time to provide them with the accurate information."

I wonder how much time Alec thinks is reasonable. When the Daily Telegraph went to press last night it said Cornwall Council had been given an additional three days to explain the answers which the council itself had earlier provided in response to a Freedom of Information question.

The fact that the council can't tell the difference between pounds and rupees might explain the mind-boggling headline figures for some of the credit card items. It hardly inspires confidence in the council's financial controls. And we still don't know why it was necessary to spend any money at all on things like fish tanks, disco equipment or silk ties.

This story has legs.

Scrapped ferry link wasted more than £700K

Friday afternoons are clearly a popular time for Cornwall Council to post answers to FoI questions - here's another, in response to a query about the Penzance-Isles of Scilly ferry link:

The FOI request asked how much we had spent on Option A for which the answer is £724,606.32 comprising:
ECI contractor (design preparation) 463,507.96
Legal & internal consultancy 227,326.81
Other Costs 33,771.55