A DAMNING report has highlighted a catalogue of concerns over administrative procedures at an under-fire residents’ association.
But bosses at Manor Residents’ Association (MRA), in Kilmarnock Road, Hartlepool, have “welcomed” the findings and say they have already made changes.
Hartlepool Borough Council’s internal audit team carried out the review and found a range of “significant issues” which needed addressing immediately.
The audit was carried out to provide assurances that MRA has adequate arrangements in place to manage funding.
A spokesman for MRA’s board described the report as “robust” while manager Angie Wilcox, a Labour councillor, said they have been working with the council to resolve the issues.
The Mail has received a copy of the draft report and highlighted concerns included:
• No copies of payslips are kept. Officers said MRA needs to be able to demonstrate what has been paid to who and when;
• All staff tax codes for deducting tax are the same. Officers said MRA needs to ensure they receive correct information about tax codes to ensure the correct deductions are made;
• Hardship advances are operated for employees and officers said MRA needs to ensure tax implications of advances are correctly dealt with;
• Under and over payment of tax letters are regularly received from HMRC.
There was also concern about what end of year records are retained, that no attachment of earnings orders due were paid to Hartlepool Borough Council and that a number of invoices were paid as reminders or final demands.
In response, MRA has told the Mail all payslips are now kept electronically, an improved “Real-Time” tax-code system has been introduced and tax implications for hardship advances are dealt with.
Bosses blamed the under and over payment of tax letters on the HMRC software system but said their new system “meets all the needs” while all attachment of earnings orders have now been paid.
The audit, which stressed there was no “inappropriate expenditure” highlighted, showed MRA had a total income of about £443,000 between April 1, 2012, and January 21 this year, with £52,121.99 coming from Hartlepool Borough Council.
All amounts were verified but it became apparent not all amounts were in the bank account as expected because £40,000 of council income was paid into a second MRA account.
The report says Coun Wilcox was not aware of the income in the second account but she told the Mail the main business account had been targeted by external fraudsters which led to the bank freezing transactions and MRA using the other account for a “short time”.
But the audit team said “its omission means the accounts were not an accurate and valid record of MRA financial position”.
The separate account has now been closed and the £40,000 returned to the main account.
The draft report, produced in April, said about £187,000 had been spent on wages to date in 2012-13.
Queries were also raised about fuel and taxi payments but Coun Wilcox said the money was spent on transporting service users in the MRA mini bus to luncheon clubs and after-school clubs.
The draft report concluded: “No assurance can be placed on the procedures that are in place to manage funds HBC provide to MRA.
“This is the lowest level of assurance that can be given and is due to the fact that adequate administration arrangements are not in place for MRA to manage and monitor income and expenditure.”
The council reserves the right to withdraw funding if adequate measures are not implemented to address the issues raised.
A spokesman for the MRA board said: “This is a welcome piece of work.
“This audit is no different to other audits carried out in the sector and this was a great opportunity for the organisation to a receive a ‘critical friend’ from the council.
“We are pleased the council has done a thorough and robust investigation into the finances and management of MRA.”
THE audit review recommended MRA needs to:
• Implement a comprehensive payroll software package to record all relevant records needed for the proper payment of employees;
• Reconcile and monitor its own bank accounts on a weekly basis;
• Monitor its budgets on a scheme by scheme basis, allowing it to better manage the funds at its disposal and report this to the board.
The MRA spokesman, who said the organisation does a lot of good in the community, added: “It shows there are areas of improvement and this can only help the organisation.
“There is a lack of resources in the community sector and this organisation is doing a lot on the ground to meet the need.
“We are not perfect but who is? The community is still behind us and people are not voting with their feet.
“We need to improve a few administrative issues but as far as I’m concerned this gives us the green light to move forward.”
Coun Wilcox said MRA has worked fully with the local authority and said the majority of the issues have been resolved.
Coun Wilcox, who represents the Manor House ward, added: “I welcome the audit, which is supposed to raise areas of improvement, and the local authority is telling us this is where we need to improve.
“The local authority staff have been really helpful and supportive and not left a stone unturned.”
Coun Wilcox added MRA had recently started running two new projects, a family support project backed by the Tudor Trust which is employing two people, and another scheme to tackle substance and alcohol misuse which will recruit one new staff member.
The audit also found in October last year that MRA paid salaries for Who Cares North East employees by cheque and said payments of that nature need to be properly recorded and agreed at board level.
Coun Wilcox said that is the case.
Who Cares (NE), which provides a handyperson, connected care and independent living service across town, is a community interest company with bases at Manor Residents’ Association, Burbank and West View.
The audit also noted that a number of payments had been made by MRA on behalf of Who Cares (NE), including petty cash and petrol costs, with an explanation that a “reconciliation” would be carried out at the year end for MRA to recoup the costs.
COUNCIL bosses say the audit review was carried out to provide “assurances” that Manor Residents’ Association has adequate arrangements in place to manage funding.
No date has yet been set for when the final report will be presented to Hartlepool Borough Council’s audit and governance committee.
A council spokesman said: “The review of Manor Residents Association by the council’s internal audit section was undertaken to provide assurance that the association has adequate arrangements in place to manage the funding it receives from the council.
“In line with the council’s normal audit procedures, if this review identifies areas where systems or procedures need to be improved, appropriate recommendations would then be made by the auditor.
“The council would then ensure that any recommendations are implemented.
“At this stage the report is still in draft format so it would not be appropriate for the council to comment further at the present time.
“However, once the report is finalised it will be presented to the council’s audit and governance committee.”
The leader of the council, Coun Christopher Akers-Belcher, said: “I have not seen the report but this is part and parcel of the work of the audit team and with any organisation that receives money, it is about identifying any weaknesses in the systems they may have and collectively pulling together to ensure they are as robust as possible.
“From my point of view, it is about giving people faith that money is being well spent.”
The audit did not review individual contracts of employment.
Earlier this year, Manor Residents’ Association was forced to give a cleaner £9,000 for paying her less than the minimum wage.
Employment judge Andrew Buchanan described the actions of the charity as “outrageous” which led to calls for manager Angie Wilcox to resign from her role as a Hartlepool councillor.
Linda Gooding, 56, was awarded £8,805 at an employment tribunal after she worked for the charity for three years on less than the minimum wage and repeatedly did not get paid.
That led to Government watchdog, the Charity Commission, calling into question the “wider running” of the charity.