Fraud risk exposed at council-run car boot sales

Calderdale Council operates car boot sales at Brighouse and Halifax but an audit by managers identified a catalogue of problems.

Some of the issues go back several years but were not fully resolved despite management assurances that action had been taken, a report noted.

The audit, which rated the financial controls as “weak”, identified 12 weaknesses, including:

• The incorrect charge displayed outside Brighouse car boot sale.

• Unexplained discrepancy between cars counted by auditors and receipts issued.

• Receipts did not show car registration numbers and cash collection sheets not completed in full.

• No segregation of duties between collection of income, banking of income and completion of collection sheets at Brighouse.

• A manager said monitoring of car boot sales income is not undertaken.

• There are no procedural guidelines relating to the operation of car boot sales - a problem identified in four previous audits.

• Car boot sales do not achieve their budgeted net income.

The report concluded there was a “potential loss of income to customers due to incorrect charges being displayed”.

There was also the potential for fraud and no protection for staff against allegations of fraud. The report said management was unaware of the income being generated.

“(There is) potential for fraud and error due to a lack of clear documented procedural guidance,” the report noted.

A follow-up audit has since been carried out which has improved the auditors’ opinion to “adequate”.

Five recommendations for improvement were made.

The issues were discussed last night by the council’s Audit committee.

The committee also discussed a separate audit report into the North and East Halifax Locality Team, a team of children’s social workers based in Halifax.

That report identified problems including the incorrect allocation of annual leave, return-to-work sickness interviews not being carried out and unauthorised petty cash payments.

Council’s head of finance, Pete Smith, said: “It’s important to us that all council teams follow our rules so people can be confident that they’re receiving fair and honest services. To make sure this is happening, we carry out regular, routine checks – and the majority of areas have adequate controls in place. The audits of car boot sales and the North and East Halifax Locality Team were part of these routine checks. No fraud was detected in either case. Recommendations were made to tighten up certain administrative processes.

“Following the recommendations, both areas have taken immediate action to address the issues. For example, systems are being improved; more management checks are being made; and managers and our audit team are working closely with staff to make sure they understand our rules and how to follow them. We are continuing to monitor both areas.”