Agenda item

With reference to Article 16 of the minute of its meeting of 17 April 2024, the Council had before it a report by the Chief Officer - Finance which sought approval to accept the Accounts Commission findings relating to the significant fraud perpetrated against the Council.

The report recommended:-

that the Council -

(a)           note the content of the Accounts Commission report and accept the Commission findings contained therein;

(b)           commend the individual who identified the fraud, with the Chief Executive writing to them to express the Council’s gratitude;

(c)           note the Commission finding (4) in respect of the Internal Audit function regularly considering areas that might be perceived as low risk when developing audit plans and instruct the Chief Internal Auditor to consider this finding within the proposed Internal Audit Plan for 2025/26-2027/28, which was due to be presented to the Audit, Risk and Scrutiny Committee in February 2025;

(d)           ask the External Auditor to set out in their Annual Audit Plan for 2024/25 and future years how, in light of the Commission’s findings, the tests of assurance they undertake may be revised in respect of the significant risks of material misstatement due to control weaknesses and fraud caused by management override of controls; and

(e)           refer the matter to the Audit, Risk and Scrutiny Committee, with the Chief Officer - Finance and Chief Internal Auditor providing a joint report on the implementation of the Commission findings and action plan no later than September 2025.

Councillor Greig moved, seconded by Councillor Al-Samarai:-

That the Council approve the recommendations contained within the report.

Councillor Malik moved as an amendment, seconded by Councillor Blake:-

          That the Council -

(1)       agree recommendations (a) - (d) of the report;

(2)       agree recommendation (e) as follows:- Refer the matter to the Audit, Risk and Scrutiny Committee, with the Chief Internal Auditor providing a report on the implementation of the Commission findings and action plan no later than September 2025;

(3)       agree that no control system is fool proof and as section 3.15 of the report to Council in April 2024 highlighted, controls are designed on the basis that most people are honest and trusted, nevertheless this alleged embezzlement highlights failures on the Council’s part over a 17-year period;

(4)       instruct the Chief Officer - Finance to continue to seek to use any relevant remedy available to recover as much money as it can from the individual concerned; and

(5)       instruct officers to identify proactive methods for expediting the return of money to the people affected and report the implications to the next meeting of the Finance and Resources Committee.

On a division, there voted:-

For the motion  (22)  -  Lord Provost; Depute Provost; and Councillors Al-Samarai, Allard, Alphonse, Bouse, Hazel Cameron, Clark, Cooke, Copland, Cormie, Davidson, Fairfull, Greig, Henrickson, Hutchison, MacGregor, McLellan, Mennie, Radley, van Sweeden and Yuill.

For the amendment   (19)  -  Councillors Ali, Blake, Bonsell, Boulton, Brooks, Crockett, Cross, Graham, Grant, Kusznir, Lawrence, Macdonald, McLeod, Malik, Nicoll, Mrs Stewart, Thomson, Tissera and Watson. 

The Council resolved:-

to adopt the motion.