What the audit report said

The council’s Internal Audit department completed their report on Burngreave New Deal’s activities. They were entitled to do this because the council is the accountable body for BNDfC. This means that all money received by BNDfC from Central Government has to pass through the council so the council can be sure it is being spent properly.

The auditors were asked to look into:

• The general governance arrangements of BNDfC.

• The letting and tendering of contracts by BNDfC and, in particular, the letting of the contract to the JMJ Group whose Managing Director is Jack Davies.

• The recruitment of Bill Husband as the Acting Deputy Chief Executive and, in particular, reference and past employment checks.

Five key findings from the report are as follows:

1. BNDfC paid at least £110,118 + VAT (£129, 389) to the JMJ Group – the report could not verify the exact total, as there was conflicting information from BNDfC. This included £55,300 + VAT (£64,978) for Bill Husband to be deputy chief Executive for 6 months (paragraph 14).

2. John Clark (chief executive) and Rose Ardron (chair of the Board) knew Jack Davies and Bill Husband from national networking and knew they had been suspended from South Kilburn NDC (paragraph 25)

3. The report states that John Clark and Rose Ardron did not share this information with anyone else on the interviewing panel (paragraph 25).

4. The Partnership Board was not informed Bill Husband had been suspended. John Clark and Rose Ardron stated that they did not know Bill Husband had been sacked at this point (paragraph 30).

5. The report found that tendering processes were not followed for all of JMJ's contracts (paragraph 18), and references were not requested in the appointment of Bill Husband (paragraph 29).

The report made the following recommendations

Governance arrangements to be improved, with measures including minutes of the subgroups going to the full board, board members attending training, financial procedures to be formally adopted and delegated powers to be reviewed.

Contract tendering arrangements to be improved following a review. The process for inclusion on the preferred tendering list to be reviewed and to include evaluation, risk assessment and adequate references.

BNDfC should not use any company with which Jack Davies or Bill Husband have an involvement, without a full assessment of the risks and without obtaining satisfactory written references.

When BNDfC make an interim appointment or appoint a consultant, the process should be clearly documented and agreed in advance by the board. References are to be obtained for all appointments and, if there are any concerns with the references, these should be shared with the interview panel or the board if the appointment is senior.