WALTHAM FOREST: Secret fraud report released

THE secret findings of an anti-fraud investigation into an education company’s alleged mis-use of money intended to help at-risk children has finally been made public.

A probe into EduAction, which used to manage schools in the borough, found that it is likely company staff exploited a poorly drafted and monitored council contract to move money it was paid for the Youth At Risk programme into other areas of its business.

The cabinet member responsible for Youth At Risk at the time was current council leader Chris Robbins.

A council decision to block the release of the report was overturned following a complaint by Chingford MP Iain Duncan Smith to the Information Commissioner.

A subsequent report into the allegations surfaced as part of the independent panel review of council contracts, which uncovered widespread and long-term financial chaos at the Town Hall.

But the latest report, which is dated July 2008, provides further evidence that young people in poor areas of the borough at risk of exclusion did not receive support through a £240,000 Neighbourhood Renewal Fund grant between 2003 and 2006.

It calls on the then Director of Finance to “take appropriate action in view of the possibility of breach of contract by EduAction due to fraudulent action”, after the investigation found evidence that the council paid out as much as £130,000 more than was formally agreed by the Local Strategic Partnership (LSP), which was responsible for monitoring renewal funds.

The investigation also found that EduAction:

• deliberately misled the council over how many children had been helped

• ‘abused’ conditions relating to the use of NRF

• were reluctant to discuss how funds were used

• were ‘deliberately opaque’ in descriptions of funding sources and budgets

• claimed for, and was paid, management fees to which it was not entitled

• put a whistleblower under ‘sustained pressure’ during a dispute involving instructions to delete documents

• Initiated and shaped the programme of which it was the beneficiary

The council also comes in for sharp criticism.

It was found that the contract was not signed by anyone from EduAction, meaning the council’s regeneration department effectively signed a contract with itself.

The document also included a “highly irregular clause”, which stipulated that EduAction could keep any operating surplus as long as the lead officer was satisfied with the programme’s overall level of performance.

This is described as “a green light to the provider to divert funds and make economies in services”.

Despite the inclusion of the clause being referred to the council's legal department, no-one could explain its existence.

Monitoring officers also were found to have failed to do their job and payments to EduAction were approved despite persistent non-compliance with funding requirements.

EduAction previously argued that the criticisms of EduAction in the report were unjustified.

A police investigation into the allegations found there was insufficient evidence to bring criminal charges.

Iain Duncan Smith said: “I believe the report illustrates an appalling level of management, with individual officers and councillors completely failing in their duty of care.”

“The report also begs serious questions about the management of renewal funds as the letting of these contracts has been appallingly slack and open to abuse.

“Andrew Kilburn asked for an independent review of these contracts, but since he has now left, I have asked the new chief executive to publish these contracts urgently.”

Click here to follow the Waltham Forest Guardian on Twitter

Comments (15)

Please log in to enable comment sorting

11:21am Wed 11 Aug 10

rubberneck says...

A police investigation into the allegations found there was insufficient evidence to bring criminal charges.

Beyond belief!

Are there any heads rolling or diciplinary action?
A police investigation into the allegations found there was insufficient evidence to bring criminal charges. Beyond belief! Are there any heads rolling or diciplinary action? rubberneck
  • Score: 0

11:26am Wed 11 Aug 10

Augustus says...

Rip off the council for quarter of a million and it's swept under the carpet, fiddle the dole for 25 quid and the whole weight of the law descends upon one. Justice? Not as we know it!
Rip off the council for quarter of a million and it's swept under the carpet, fiddle the dole for 25 quid and the whole weight of the law descends upon one. Justice? Not as we know it! Augustus
  • Score: 0

2:09pm Wed 11 Aug 10

NT says...

There are some immediate questions that arise.
What did Councillor Robbins know about this, and when; and what - if anything - did he do about it?
Why has the Council fought so hard to keep this document from the public domain?
How much has this now pointless effort cost?
What has happened since the report was completed and forwarded to Interim Chief Executive Roger Taylor in July 2007? Specifically, has EduAction been asked to return some or all of the YAR funding?
And finally, the Council needs to come clean about the £1m. BNI-EduAction contract that followed in 2006-08, because at first sight this appears to have been disfigured in much the same way - with confusion about objectives, a contract signed between the Council and itself, poor or non-existent monitoring, doubtful outputs, etc..
There are some immediate questions that arise. What did Councillor Robbins know about this, and when; and what - if anything - did he do about it? Why has the Council fought so hard to keep this document from the public domain? How much has this now pointless effort cost? What has happened since the report was completed and forwarded to Interim Chief Executive Roger Taylor in July 2007? Specifically, has EduAction been asked to return some or all of the YAR funding? And finally, the Council needs to come clean about the £1m. BNI-EduAction contract that followed in 2006-08, because at first sight this appears to have been disfigured in much the same way - with confusion about objectives, a contract signed between the Council and itself, poor or non-existent monitoring, doubtful outputs, etc.. NT
  • Score: 0

2:58pm Wed 11 Aug 10

Heartlysmum says...

Bang em all up.
Bang em all up. Heartlysmum
  • Score: 0

6:21pm Wed 11 Aug 10

Walthamster says...

We have to thank Iain Duncan Smith for getting this done. Ordinary members of the public have run up against a brick wall trying to get this kind of information, which is supposed to be available.

But I have to ask - if a Tory MP can do this, why didn't our two Labour MPs do anything over the many years that this council has been mismanaging public money? And is there any chance that the new MPs will do anything?
We have to thank Iain Duncan Smith for getting this done. Ordinary members of the public have run up against a brick wall trying to get this kind of information, which is supposed to be available. But I have to ask - if a Tory MP can do this, why didn't our two Labour MPs do anything over the many years that this council has been mismanaging public money? And is there any chance that the new MPs will do anything? Walthamster
  • Score: 0

8:51pm Wed 11 Aug 10

everoptimistic says...

If Cllr Robbins was Cabinet member for Youth at Risk at this time and new nothing about what was going on then he wasn't really up to the job was he. However if he did know what was going on ????
If Cllr Robbins was Cabinet member for Youth at Risk at this time and new nothing about what was going on then he wasn't really up to the job was he. However if he did know what was going on ???? everoptimistic
  • Score: 0

9:25pm Wed 11 Aug 10

EducateCommunities says...

Clear fraud plain and simple and who suffers the disadvantaged youth of Waltham Forest and all the Council Tax Payers.

This has been hushed up and a major cover up was going on only because it was a Labour run council did it get exposed they got rid of the former Council Chief Executive, Andrew Kilburn.

He ordered a independent panel review, but was forced out of his position after a breakdown in his working relationship with leading councillors. He received a pay-off of £365,000 only after signing a gagging order.

The only reason it was ever brought to light was because of another Tory MP Iain Duncan Smith of all people.

So how can the Council Leader Chris Robbins,who must of know about this become promoted from Councilor to Council Leader Scandalous. Stinks of Kickbacks to me and anyone with any sense can see that.

We are not talking about small amounts of money here hundreds of thousands of pounds running into millions.

Thanks Mafia of Waltham Forest
Especially Don Chris Robbins.
Clear fraud plain and simple and who suffers the disadvantaged youth of Waltham Forest and all the Council Tax Payers. This has been hushed up and a major cover up was going on only because it was a Labour run council did it get exposed they got rid of the former Council Chief Executive, Andrew Kilburn. He ordered a independent panel review, but was forced out of his position after a breakdown in his working relationship with leading councillors. He received a pay-off of £365,000 only after signing a gagging order. The only reason it was ever brought to light was because of another Tory MP Iain Duncan Smith of all people. So how can the Council Leader Chris Robbins,who must of know about this become promoted from Councilor to Council Leader Scandalous. Stinks of Kickbacks to me and anyone with any sense can see that. We are not talking about small amounts of money here hundreds of thousands of pounds running into millions. Thanks Mafia of Waltham Forest Especially Don Chris Robbins. EducateCommunities
  • Score: 0

12:18am Thu 12 Aug 10

Techno2 says...

Is there a link to the report on the council's website?
Is there a link to the report on the council's website? Techno2
  • Score: 0

3:18am Thu 12 Aug 10

EducateCommunities says...

From http://www.walthamfo
rest.gov.uk/index/le
gal/anti-fraud.htm


This authority is required by law to protect the public funds it administers.

It may share information provided to it with other bodies responsible for auditing or administering public funds, in order to prevent and detect fraud.

If you know of anyone committing any kind of fraud, whether a member of the public or an employee of the council please let us know on
:020 8496 4299.
From http://www.walthamfo rest.gov.uk/index/le gal/anti-fraud.htm This authority is required by law to protect the public funds it administers. It may share information provided to it with other bodies responsible for auditing or administering public funds, in order to prevent and detect fraud. If you know of anyone committing any kind of fraud, whether a member of the public or an employee of the council please let us know on :020 8496 4299. EducateCommunities
  • Score: 0

8:31am Thu 12 Aug 10

NT says...

I'm happy to forward electronic copies of the report to anyone who wants one.
NTiratsoo@aol.com
I'm happy to forward electronic copies of the report to anyone who wants one. NTiratsoo@aol.com NT
  • Score: 0

10:19am Thu 12 Aug 10

Janet1 says...

Where have all the comments gone? There were 10 here earlier today. I don't want the Guardian to be sued for libel. But if someone's posting evidence of where our money is going, this should be made public.
Where have all the comments gone? There were 10 here earlier today. I don't want the Guardian to be sued for libel. But if someone's posting evidence of where our money is going, this should be made public. Janet1
  • Score: 0

10:27am Thu 12 Aug 10

Janet1 says...

Oh good, they're back. Thank you, Guardian!

And what a joke that the council asks people to ring it with allegations of fraud. Or maybe not. That would be a good way for the council to find out who knows what about whom ...
Oh good, they're back. Thank you, Guardian! And what a joke that the council asks people to ring it with allegations of fraud. Or maybe not. That would be a good way for the council to find out who knows what about whom ... Janet1
  • Score: 0

12:03pm Fri 13 Aug 10

EducateCommunities says...

I very much doubt that the Council Leader "Robbins of Waltham Forest" and his merry men would want to field any public questions on this secret matter.

Funny really when his role as leader of the council. He is responsible for finance and our budget plus excellence in service provision.

But than he was the council cabinet member responsible for Youth At Risk at the time, does not bode well for the council tax payers getting a fair result about this serious matter.

We should not be fobbed off with poor excuses when our youth and community are facing massive cutbacks sanctioned by the council, when they have squandered our money like this, we need the truth and our funds back.

No EduAction we want Fraud-Action not a cover up.
I very much doubt that the Council Leader "Robbins of Waltham Forest" and his merry men would want to field any public questions on this secret matter. Funny really when his role as leader of the council. He is responsible for finance and our budget plus excellence in service provision. But than he was the council cabinet member responsible for Youth At Risk at the time, does not bode well for the council tax payers getting a fair result about this serious matter. We should not be fobbed off with poor excuses when our youth and community are facing massive cutbacks sanctioned by the council, when they have squandered our money like this, we need the truth and our funds back. No EduAction we want Fraud-Action not a cover up. EducateCommunities
  • Score: 0

4:51pm Fri 13 Aug 10

EducateCommunities says...

Most politicians are the same, greedy, snouts in the trough, deceitfull, dishonest, self centred and arrogant.
I would'nt be surprised to eventually find out that the present incumbents of Waltham Forest Council are silently secreting public assets away for their own ends whilst we speak.

No faith in them at all, especially the so called leaders MP Stella Creepy and Chris Robbin-Us..
Most politicians are the same, greedy, snouts in the trough, deceitfull, dishonest, self centred and arrogant. I would'nt be surprised to eventually find out that the present incumbents of Waltham Forest Council are silently secreting public assets away for their own ends whilst we speak. No faith in them at all, especially the so called leaders MP Stella Creepy and Chris Robbin-Us.. EducateCommunities
  • Score: 0

6:11pm Mon 16 Aug 10

SarahSE says...

Didn't the report recommend that the council should call a public meeting so they could give us a full explanation of what had happened? This should now be done, as we were promised by councillors pre-election.
Didn't the report recommend that the council should call a public meeting so they could give us a full explanation of what had happened? This should now be done, as we were promised by councillors pre-election. SarahSE
  • Score: 0

Comments are closed on this article.

click2find

About cookies

We want you to enjoy your visit to our website. That's why we use cookies to enhance your experience. By staying on our website you agree to our use of cookies. Find out more about the cookies we use.

I agree