11 Apr 2024
No action is to be taken following an investigation into the allocation of St Albans district council building contracts and the misuse of public sector funds.
In July 2021, three men were arrested as part of a National Investigation Service (NATIS) investigation into fraud, bribery and money laundering totalling £2.5m of public sector funds.
Suspects aged 47, 51 and 55 were arrested at various locations in Harpenden and Ruislip, one man for fraud by abuse of position, bribery and money laundering, and the others for bribery and money laundering.
All three were subsequently released under investigation following property searches and interviews.
At the time, SADC chief executive Amanda Foley said: “We called the police in to investigate when our internal processes picked up a potential issue of concern to our internal audit team that they felt merited further investigation.”
It is thought this related to work by SADC’s internal audit team that resulted in a referral to the police in their anti-fraud report of January 2020.
Although the NATIS investigation did not find evidence of direct theft of public sector monies, it did reveal a pattern of conflicts of interest, one-sided contracts, and negligent reporting that resulted in a council employee having unfettered discretion to award four companies substantial sums of public sector funds for services.
A spokesperson for the National Investigation Service confirmed this week that their probe did not result in any further action.
“This matter was investigated and due to a number of factors, and following review with the Crown Prosecution Service a decision was taken that the case would not be prosecuted.”
The decision not to pursue the matter was not down to St Albans district council.
An SADC spokesperson told the St Albans Times: “We have been informed by the police that the case is not to be prosecuted and that no further action will be taken. That decision was out of our hands.”
A spokesperson for St Albans Conservatives said: “The Conservative Group at St Albans and district council were aware that there had been a suspected fraud that had been reported to the police and were extremely concerned about it. The Conservative chair of the audit committee found out about it from an article in the press, not the council, and informed his colleagues.
“Conservative members of the audit committee tried hard to obtain information about what had happened, how much money was involved and what the Liberal Democrat council intended to do about the council’s processes if they were vulnerable to fraud. They were rebuffed, and officers refused to provide any information on the matter, supported by Liberal Democrat councillors who were a majority on the committee. This is on the record and can be seen in the audit committee recordings.
“Accordingly, the Conservatives resigned from the audit committee. Two of them were accountants and felt that there was a lack of transparency and continuing could harm their professional reputations. Since 2018-19 of course, the council has been unable to get the accounts externally audited, and anecdotally there appears to be a c£700k ‘disparity’ in the books.
“Given the general lack of information from this council, we do not know why this has happened or whether it is connected to the case that was reported to the police.”
