A cash-strapped council contractor is risking paying fraudulent entertainment expenses on its company credit card, an audit has revealed.
Use of Tayside Contracts’ corporate credit card to take clients out has been called into question at a time when members of staff are being asked to consider taking voluntary redundancy.
In an audit report to the Tayside Contracts joint committee, chartered accountants Henderson Loggie raised an issue around the risk of fraudulent payments made.
It claimed that records of who had been entertained had been omitted and procedures were also not being followed.
Taking a sample 10 payments totalling £358.40, the auditors found eight instances, totalling £300.71, where this had happened and all records had not been recorded with the managing director’s personal assistant as is procedure.
The auditors concluded that the use of the corporate credit card was not fully controlled and made three recommendations which would give additional assurances that all payments are for bona fide business purposes.
Managing director Iain Waddell said the company has already changed its procedures to implement the recommendations.
He said: “Our auditors looked at where there are potential risks within the business.
“We had only a few suggestions and none of them were particularly serious. Over a 12-month period £358.40 was all we spent on business lunches.”
The review was carried out into a number of areas of company procurement and spending as part of the usual audit.
The review also followed an investigation by Perth and Kinross Council after allegations were made by an outside complainant.
The investigation concluded there was no evidence to support a number of allegations made, but a review was carried out to look at other areas of concern, including the use of corporate credit cards, the process for awarding work to sub-contractors, the use of sub-contractors and casual employees.
The report also highlighted instances where financial regulations were not followed in full when awarding work to sub-contractors. The majority of these related to circumstances where the contract was urgently required.
Representatives of Dundee City, Angus and Perth and Kinross councils will consider the report today.