Serious fraud investigation report produced

Friday May 11th 2018

Midlothian Council Fairfield House Main

A report on a serious fraud investigation involving Roads Services will be heard in public at a special meeting of Midlothian Council’s Audit Committee on Tuesday 15 May.

Following serious allegations being raised by members of staff regarding suspected procurement irregularities, an investigation of the allegations has been conducted by the Council’s Internal Audit and Corporate Fraud team. As a result a confidential report has been sent to Police Scotland.

The initial allegations raised by employees included an inappropriately close relationship between Contractors and Staff, work regularly being awarded to Contractors that could have been carried out by Council Staff, and Council equipment being used for non-Council jobs.

During the investigation, it was discovered that payments had been made to a Contractor not on the Procurement Framework and this amounted to £2.1M over a period of 7 years.

No allegations were made relating to work not being carried out or subject to inflated invoices.

A Senior Manager resigned during the investigation and is no longer employed by the Council.

A second phase of investigation is now underway which together with the Chief Internal Auditor’s recommendations will work towards ensuring Staff and Contractors maintain proper professional relationships.

The Audit Committee report sets out the actions recommended by the council’s Internal Audit to address weaknesses identified in internal processes and procedures.

The report also gives details of work to be carried out by the council’s external auditors, EY, to ensure that money spent, work performed and contract management is consistent with procurement decisions. This will include detailed analysis and testing.

Midlothian Council’s Chief Executive Kenneth Lawrie said:

“I am, along with senior colleagues, absolutely determined that we will get to the root of these issues. There can be no place within the council for poor practice, wrongdoing or impropriety. We have a ‘zero tolerance’ approach to this and will act robustly to tackle and resolve it, taking all further actions which may be necessary.”

The council is urging anyone concerns about the misuse of council resources or inappropriate practices, then please report them to the council’s confidential whistleblowing hotline:

0131 271 3572/3573

or email: internalaudit@midlothian.gov.uk

Concerns can also be raised anonymously (if so desired) via the council’s website HERE.

The council report can be found HERE.

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