Report of the Select Committee on Port St Mary Commissioners

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Report of the Select Committee on Port St Mary Commissioners Report of the Select Com m ittee o n PORT ST MARY COMMISSIONERS REPORT OF THE SELECT COMMITTEE ON PORT ST MARY COMMISSIONERS At the sitting of Tynwald Court on 19th May 2004 it was resolved that a Committee of three members be appointed, with powers to take written and oral evidence pursuant to sections 3 and 4 of the Tynwald Proceedings Act 1876 , to inquire into the conduct of the Treasury, the Auditors and the Department of Local Government and the Environment in relation to the affairs of Port St Mary Commissioners in the period from 1st April 1998 to 31st March 2004, having regard to their statutory and other responsibilities in relation thereto, and to report with findings and recommendations to the December 2004 sitting of the Court. Mr P A Gawne MHK Chairman Mr D F K Delaney MLC Mr L I Singer MLC The powers, privileges and immunities relating to the work of a committee of Tynwald are those conferred by sections 3 and 4 of the Tynwald Proceedings Act 1876, sections 1 to 4 of the Privileges of Tynwald (Publications) Act 1973 and sections 2 to 4 of the Tynwald Proceedings Act 1984. Copies of this Report may be obtained from the Tynwald Library, Legislative Buildings, Bucks Road, Douglas IM1 3PW (Tel 01624 685516, Fax 01624 685522) or may be consulted at www.tynwald.orgAm All correspondence with regard to this Report should be addressed to the Clerk of Tynwald, Legislative Buildings, Bucks Road, Douglas IM1 3PW To: The Honourable Noel Q Cringle MLC, President of Tynwald, and the Honourable Members of the Council and Keys in Tynwald assembled REPORT OF THE SELECT COMMITTEE ON PORT ST MARY COMMISSIONERS PARTI OVERVIEW OF THE COMMITTEE'S WORK The Select Committee's remit 1.1 At the May 2004 sitting of Tynwald a Select Committee of three members was established - to inquire into the conduct of the Treasury, the Auditors and the Department of Local Government and the Environment in relation to the affairs of Port St Mary Commissioners in the period from 1st April 1998 to 31st March 2004, having regard to their statutory and other responsibilities in relation thereto, and to report with findings and recommendations to the December 2004 sitting of the Court. Meetings of the Committee 1.2 At its inaugural meeting held on 16fh June 2004 Mr Gawne was elected as Chairman. Your Committee has met on 13 occasions of which four have included public hearings in which oral evidence has been received from the following - Mrs S Wilson, former Chairman of Port St Mary Commissioners Mr ] Hall, Chairman of Port St Mary Commissioners Mr J Popper, former Clerk to Port St Mary Commissioners Mr C Butler, Clerk to Port St Mary Commissioners Mrs T Horne, former Deputy Clerk to Port St Mary Commissioners Mr P Hughes, Deputy Clerk to Port St Mary Commissioners Mr M Fayle, Director of KPMG Mr M Gardner, Director of KPMG Mr C J Tovell, Assistant Financial Controller of the Treasury Mr K C McGreal, Chief Internal Auditor, Treasury Mr P Whiteway, former Director of Corporate Services DoLGE Mrs Y Mel lor, Director of Corporate Services DoLGE Mr R A Hamilton, Chief Executive DoLGE 1.3 The Hansard records of this evidence are at Appendices A, B, C and D. 1.4 The Chairman of your Committee made a Statement to Tynwald Court in February 2005 to explain that it had proved impossible to meet the deadline of reporting to the Honourable Court by December 2004 because of the need to take oral evidence from a number of individuals. 1.5 When Mr Delaney failed to be re-elected to Legislative Council the Committee agreed to complete its task without seeking the appointment of a replacement member as it had already reached draft report stage. Written evidence received 1.6 The written evidence received is listed at Appendix G. Due to the volume of written evidence received it is not considered practical to include all evidence with this report - all evidence is available for inspection in Tynwald Library. Three items of written evidence referred to in this Report are reproduced and appended for ease of reference at Appendix F PART 2 STRATEGY 2.1 Your Committee agreed to set out a plan of action intended to provide adequate information to enable it to comply with the Motion agreed by Tynwald Court (a) to determine statutory responsibilities in respect of the Treasury, the Auditors, and the Department of Local Government and the Environment (DoLGE) in respect of the financial affairs of Local Authorities (b) to determine the procedures normally undertaken by them having regard to their statutory responsibilities (c) to consider the performance of Port St Mary Commissioners in respect of the management and preparation of its finances. Whilst the Motion agreed by Tynwald Court does not specifically require determination of the conduct of Port St Mary Commissioners your Committee agreed 3 that consideration of responsibilities and performance of the Commissioners was necessary to provide a clear overall picture, particularly with regard to their relationship with DoLGE and the Auditors. (d) to consider matters prior to 1st April 1998. Whilst the Motion required inquiries into the conduct of the parties in the period from 1st April 1998 to 31st March 2004 your Committee deemed it necessary to consider performance and relevant matters leading up to that period. 2.2 Your Committee is aware that the "Report On The Findings Of An Enquiry Into The Exercise By Port St Mary Commissioners"' (the Kissack Report) had already addressed the financial aspects of a deficit in the finances of Port St Mary Commissioners and had no wish to revisit the financial issues. PART 3 STATUTORY RESPONSIBILITIES 3.1 The two primary statutes are the Local Government Act 1985 and the Audit Act 1983. 3.2 The responsibility for ensuring that audited Local Authority accounts are laid before Tynwald rests with the Department of Local Government and the Environment by virtue of the Local Government Act (1985) Section 3 (2) which provides /Every local authority shall annually deliver its accounts, together with the auditor's report or reports thereon. to the Department, who shall lay the same before Tynwald in pursuance of section 11 of the Audit Act 1983' 4 DoLGE's principal role is to ensure that audited accounts are laid before Tynwald. DoLGE has no statutory responsibility to produce accounts for a Local Authority which is an autonomous body. 3.3 The responsibility for the appointment of auditors rests with the Treasury by virtue of the Audit Act 1983, which contains powers for Treasury to make the Accounts and Audit Regulations 1984. Regulation 4(1) of those Regulations requires 'AU relevant bodies shall ensure that all accounts are prepared as soon as practicable after 31st March in each year, or such other date as the Finance Board (Treasury) may direct in accordance with section 3 of the Act, and presented for audit within six months following that date, unless agreed with Finance Board (Treasury)'. 3.4 The Local Authority, or relevant body, is required to prepare its accounts and present for audit. There is no statutory timescale for the completion of the audit process. PART 4 PORT ST MARY COMMISSIONERS 4.1 Oral evidence was received from Mrs S Wilson, Mr J Hall, Mr J Popper, Mr C Butler, Mrs T Horne and Mr P Hughes on Friday 5 November 2004. 4.2 Mrs Wilson gave evidence to your Committee that she became a Commissioner in May 2000 and became Chairman of the Commissioners in 2002 at which time the deficit problem had emerged. She advised that there were staffing problems which were also causing difficulties and the Commissioners had sought the help of DoLGE in addressing the deficit. She was aware that administration costs had increased significantly since 1998. 4.3 Mrs Wilson felt that finances were the role of the office and the Board were not closely involved. Prior to 2002 the Commissioners did not see accounts before they were submitted to DoLGE 4.4 Mrs Wilson felt that there was not enough emphasis placed on financial management advice in the DoLGE Induction Course that was attended by newly elected members and officials. 4.5 Mrs Wilson felt that there was some doubt as to the precise role of the auditors. 4.6 Mrs Wilson advised your Committee that " the impression that the Board got, was that local authority reform was high on the agenda and that Port St Mary would provide an appropriate scapegoat" 4.7 Mr Hall gave evidence to your Committee that he was elected to the Board as Chairman in 2004. He was not a Commissioner during the time that the deficit emerged. He found DoLGE very supportive, particularly mentioning the Director of Corporate Services, Mrs Yvette Mellor, who had provided assistance to the Commissioners and officers in producing monthly management reports. 4.8 Mr Popper gave evidence to your Committee that he was Clerk for about 13 years from 1990 until May 2003. and came into the position without any 6 previous local authority experience or public sector experience or financial qualification. 4.9 Mr Popper advised that he had been told on appointment that his responsibility was to produce estimates but did not realise the extent of local authority responsibilities and was not aware of the statutory timetable for submission of draft accounts. 4.10 Mr Popper informed your Committee that he did not attend a DolGE Induction Course until at least seven years into the position. When he did go on a Course he did not feel-that emphasis was placed on financial matters, more on the work of DoLGE.
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