Request for information regarding Mr Anthony Snow's departure and related accounting matters
- Was Mr Snow's post made compulsorily redundant and, if so, why was he not paid his full redundancy entitlement?
From the available records, it appears that the then Auditor General decided that the Chief Operating Officer post was redundant sometime between 1 April 2009 and 27 May 2009. Mr Snow was not made compulsorily redundant because the Auditor General negotiated a voluntary severance package with him. Without such a negotiated package (the total cost of which we estimate at £750,000), Mr Snow would have been entitled to transferred Audit Commission compulsory redundancy terms of a total value of some £864,000.
- Was there a consultation period covering the redundancy of the post of Chief Operating Officer and, if so, what were the dates it ran from and to?
The available records do not indicate a formal consultation period, but it is apparent that the possibility of the redundancy of the Chief Operating Officer post as part of a restructuring of the senior management of the WAO was raised by the Auditor General with Mr Snow on 1 April 2009.
- Does the Wales Audit Office consider its accounts for 2009-10 are correctly stated in respect of Mr Snow's severance?
The Auditor General has invited the National Audit Office to examine our accounts, but that work is not yet complete. Therefore, we have not yet concluded our review of the accounts for 2009-10 and so do not have recorded information that directly meets this point. However, on the facts presently available, we do not consider that the accounts are correctly stated in respect of Mr Snow's severance, as indicated by the Auditor General's responses to the Public Accounts Committee on 7 October 2010.
- What was Mr Snow's contractual notice period and why was a part payment made and then an additional payment in lieu of notice? What was Mr Snow's termination date - as I understand that agreement was reached in June 2009, but, he did not leave until September 2009?
As far as we can tell from the documentation available, Mr Snow's contractual notice period was 13 weeks. Three month's PILON (i.e. 13 weeks) was divided between an element provided in the lump sum under the agreement to 31 July 2009 and ongoing payments between 31 July 2009 and 30 September 2009. As I understand it, this enabled pension contributions to be paid until the date Mr Snow was able and due to draw his Civil Service Compensation Scheme (CSCS) Approved Early Retirement benefits. Mr Snow's termination date was 31 July 2009. We have had advice from independent legal advisers that such an arrangement is not unusual.
- You stated in your response that the size of the payments were not disclosed by Mr Colman at the time to the then Management Committee, the current Executive Committee and Audit and Risk Management Committee. Were current or former staff aware of the payments and, if so, how many and why did they not alert the executive committee/Partners to the deal?
From our records, it appears that only one member of WAO staff other than Mr Snow (and Jeremy Colman) was aware of the payments. That person had been required by the Auditor General and the Chief Operating Officer to keep the severance arrangement confidential.
- Were any of the Partners aware of Mr Snow's severance package immediately following Mr Colman's departure in February 2010 and if so, when?
As far as I have been able to trace, we have no recorded information that indicates that any Partner, other than Mr Snow, was aware of any aspect of Mr Snow's severance package immediately following Mr Colman's departure in February 2010. I have also enquired with Partners in order to ascertain whether, regardless of recorded information, any of them were aware of the severance package in February 2010. Again, Partners have told me that they were not aware of it at that time. Executive Committee Partners became aware of the payment of the £107,580.06 lump sum in May. No Partner was aware of the full details until July 2010.
- In response to Question 10 in relation to the legal or constructive obligation at 31 March, 2010, you stated that the provision of £715,000 was "carefully considered" and explained that WAO's external auditors provided an unqualified opinion. You also stated that in the auditor's view there was an obligation. But can you tell me whether the WAO itself considered there was such an obligation and what was the basis for estimating the value of the accruals?
While we do not hold recorded information that answers this question directly, from consulting colleagues and the fact that we made the provision, I can confirm that we did consider that there was a constructive obligation. The basis for estimating the provision was our estimate of the cost of funding voluntary early severances. This is in turn was based on a sensitivity analysis of the financial effect of various levels of take up at different ages, informed by expressions of interest from staff. As expressions of interest developed into firm proposals, the estimate was refined .
- In relation to future payments related to Mr Snow's pension could you provide details of whether any similar arrangements have been made for other senior staff leaving on early retirement/severance between 2005 and 2010? If there have been, what will the cost of the pensions payments made on their behalf by the WAO be and was that information included in the relevant year's accounts ?
Similar arrangements have been made for other senior staff leaving on early retirement/severance between 2005 and 2010. To date, the cost of in-year pension payments has been charged to the relevant years' accounts, but provision was not made for the total amounts. We estimate that the total cost of pension payments in respect of such cases will be £3,459,463. As some of this has already been paid, we estimate the remaining liability at £1,048,128.
- Could you explain the provision in the 2009-10 [accounts] for redundancy, early retirement and severance costs of £875,000—up from £208,000 while the redundancy, severance and pension costs in 2009-10 totalled just £454,000?
The figure of £875,000 is for costs that accrue to 2009-10 but which are payable after the end of that year. It is made up of the £715,000 provision for the voluntary severance scheme given at note 18 to the accounts and £160,000 for two individuals, one of whom is Mr Snow. The £454,000 figure you refer to consists of cash payments made in the year either as lump sums or pension contributions.
- Could you confirm that documents relating to the decision-making which led to the decision to delete the role of Chief Operating Officer exist and could you provide those documents?
Please find enclosed a copy of an email from Jeremy Colman to Anthony Snow of 1 April 2009 (enclosure 1), which sets out reasons for the redundancy of the Chief Operating Officer post. Other than notes of discussions with our solicitors (which largely concern the lawfulness of the chosen route and legal formalities associated with it, rather than the decision to delete the role per se), as far as I can tell, this is the only document that explicitly concerns the decision to delete the role of Chief Operating Officer.
The notes of discussions with our solicitors fall within the legal professional privilege exemption provided by section 42 of the Freedom of Information Act 2000. I have considered the public interest both in favour of disclosure and in withholding the information. In favour of disclosure is the provision of some further understanding of how the decisions were made and, more generally, how solicitors advise public bodies. Against disclosure is the public interest in not undermining the relationship between lawyer and client. Also, the advice remains recent and of relevance to ongoing matters. There is inevitably a very strong public interest in favour of protecting legal professional privilege, and I have concluded that this is greater than the public interest in disclosure and that the exemption should be maintained. I am therefore not providing the notes of discussions with our solicitors.
Also enclosed is a copy of a business case dated 2 June 2009 (enclosure 2), which considers financial options for the redundancy, and which was relevant to the decision, despite not explicitly addressing the decision to delete the Chief Operating Officer role. I have redacted the name of the person that prepared the business case as that information falls within the personal information exemption (section 40(2) of the 2000 Act), which is an absolute exemption. The exemption applies because disclosure would breach the data protection principles of the Data Protection Act 1998. This is because the person concerned is not so senior as to be of a source of legitimate public interest. Also, disclosure could cause unwarranted harm to the individual.
Please note that the business case contains some inaccuracies. These are unhelpful but do not affect the lawfulness of the severance arrangement. Firstly, under the table on the first page, the document says, "The second option, CER plus, can also be discounted on the grounds that the model is theoretical and cannot actually be paid by PCSPS." This is not the case. Independent advice confirms that this was the package to which Mr Snow was fully entitled under para 1.7 of the CSCS. Secondly, in the last paragraph on the first page, the business case says, "the member of staff could reject the AER route and take sick leave. This would cost WAO 6 month's full pay and 18 months on half pay. This would equate to about £240k, inclusive of oncosts." This was not a relevant or realistic consideration, and it should not have been included in the business case. However, it did not in fact result in an irrational decision. Thirdly, the business case considered accounting treatment. This also was not a relevant consideration, and should not have been included in the document. Again, however, this does not alter the fact that the arrangement was reasonable.
- Could you provide me with a detailed breakdown of the £3,335 legal costs charged by the lawyers acting for Mr Snow as part of the compromise/severance agreement?
The sum breaks down into a fee of £2,900 and VAT of £435. We do not hold information that provides any further breakdown.
- Could you provide details of the travel claims made by Mr Snow and Mr Colman during 2008-09 and 2009-10? This should be comprehensive and include taxi, train, car hire and any airline fares (and, if applicable, details of the destinations if by air). If the WAO booked taxi, train, car hire and any airline fares on behalf of the two individuals, rather than them making claims, please also detail? Please can you confirm if whether at any stage first class rail travel was provided for Mr Snow to travel between his home and the office in Cardiff and, if so, why and what was the cost involved?
Please see the spreadsheets below (enclosures 3, 4, 5 and 6), which summarise the details of travel claims.
The records show that Mr Snow claimed for travelling from Swansea to Cardiff by first class rail on one occasion in the period, which was on 19 May 2008. The records also show that he travelled on from Cardiff to London Paddington on that day, so it is possible that this was a two part booking on his behalf for a journey from Swansea to London (perhaps because a Cardiff to London ticket had initially been booked inadvertently) rather than a claim for a journey to the Cardiff office. However, as far as I can tell, we do not have records to substantiate either scenario.