Parish council reveals £250K financial scandal over 11 years

Colney Heath Parish Council uncovered financial irregularities totalling over £250,000.

Colney Heath Parish Council uncovered financial irregularities totalling over £250,000. - Credit: Google Streetview

More than a quarter of a million pounds was illegally paid out of parish council coffers over the course of a decade, it has been revealed.

Colney Heath Parish Council identified over £250,000 had been paid in ultra vires payments during the late John Dean's tenure as parish clerk.

Ultra vires is an act which requires legal authority but is done without this being granted, and these payments are termed "invalid" because they are not approved by the council.

A catalogue of financial misdemeanours was uncovered between September and December 2015 by an interim parish clerk following Mr Dean's death earlier that year, and Herts police were called in to investigate the following January.

It was established that a total of £254,767.29 had been paid out between April 1 2004 and July 10 2015 - representing between 15-25 per cent of the parish precept every year over that period.

This was not picked up as audit reports were posted to the clerk's home address and not subsequently reviewed by the council. The clerk made verbal reports to the council on these audits, and there is no evidence councillors were ever provided with copies.

It was discovered that John Dean had no training or experience in local government, had not undertaken any qualifications for the role, and lacked knowledge of financial transparency, legislation, payment regulation and how to manage monies in the public purse. No contract of employment was ever issued and no references were taken up.

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An investigation into the parish finances revealed over £100,000 was taken in petty cash with no records of what this money was used for, £5,930.80 in cash was paid out without authorisation for cleaning the parish office, and cash bonuses of £16,140.37 were paid over the period without approval.

The clerk had also approved his own overtime of between 20-30 hours a month and a pay rise of 52 per cent, and he inflated his salary on a letter he himself signed to obtain a mortgage. There was no record of Mr Dean being approved as an essential car user despite this being paid monthly, resulting in an over-payment of £13,319.20.

Ultra vires payments had been made to various organisations and individuals including Smallford Residents Association, the Scout and Guide Association, Charles Morris Hall, Treasure Tots nursery, the Neighbourhood Plan project manager, Colney Heath village hall and Colney Heath Football Club.

He approved all payments and amounts himself without referring to councillors and without an appropriately approved scheme of delegation in place.

Treasure Tots was set up following incorrect advice in 2004 and closed in July 2016 after it was confirmed the parish council did not have the power to operate a children's nursery. Mr Dean was also employed as the nursery's secretary for five hours a week between 2005-2015, during which time he gave himself a 91 per cent increase in his hourly rate.

Parish council chair Cllr Peter Cook said: "I am pleased that council have now resolved to conclude this matter so that we can focus on the current needs of our electorate rather than previous misdeeds.

"I believe the report highlights a disappointing decade of financial and process irregularities.

"The challenge was brought to our knowledge from autumn 2015 and then we had to wean the organisations off of what had become custom and practice and expectation over many years.

"I would especially like to thank those councillors who kept the focus on good governance and transparency of decision making, especially after involving Herts Constabulary in 2016 and the new full-time clerk for her extensive research to support the wide-reaching claim over the last few years."

The parish council has been offered a settlement of £45,900 for the losses by insurers Zurich, which will be allocated proportionately throughout the parish. Although further investigation could have continued, it was deemed that it was in the best interests of the council and the electorate for the settlement offer to be accepted.