What was the issue?

Council D entered into a contract without complying with its own requirements set out in its standing orders and financial regulations.

Member’s interests were not declared.

What happened?

The Council’s financial regulations stated that tenders should be obtained before incurring items of expenditure over £1,000. Any exceptions to this rule must be approved by the Finance Committee. The Town Clerk was authorised to incur expenditure up to £1,000 without specific approval.

The Council invited quotations from three suppliers but two declined to submit a tender. The remaining supplier was a relative of the mayor.

A Council committee made up of the Mayor, the deputy Mayor and the Clerk made the decision to award the contract.

The Mayor only declared an interest after the Council awarded the contract.

The actual cost of the contract was over £1,000. No approvals were sought from the Finance Committee.

What was/could be the impact? 

Breach of the Council’s own rules for entering into a contract exposes the Council to challenge at the audit and through the courts. This could result in significant legal and audit fees.
The Mayor’s failure to declare an interest was a breach of the Code of Conduct.

What improvements should be made? 

Members must consider if they have an interest in any business being conducted by the Council. They must also declare these interests promptly in accordance with the Code of Conduct.