Council criticised for awarding £50,000 of contracts to charity run by councillors

An auditor's report found “major failings” at a town council after it was revealed to have awarded £50,000 worth of contracts to a charity run by two current councillors.

Auditing Solutions carried out an internal review of Porthcawl Town Council’s finances for 2020/21. 

They found the council, in south Wales, did not formally tender contracts given to Credu Charity, whose director and company secretary, husband and wife Michael and Norah Clarke, are councillors for both PTC and Bridgend County Borough Councils.

The charity's stated aim was to provide learning, educational and employment opportunities for the whole of the community, while preserving and developing recreational spaces for future generations.

The now-liquidated charity last filed accounts for the year up to 31 July 2019, in which it reported a total income of about £508,000.

The council must hold a formal tender process for contracts above £25,000, according to its standing orders and financial regulations.

But auditors found “major failings” and evidence of “unacceptable practices” in the way PTC complied with legal, financial and democratic processes during the past year, local media reported. 

The reported documents show the charity invoiced the council for services including grass-cutting, repairs to public benches, maintaining and refurbishing public toilets, an outdoor cinema event and maintaining an underpass.

The town clerk could not find proof of a formal decision made to award contracts in excess of £25,000, said the auditors, who also failed to find records of a formal tender process for services provided by the charity during the 2020/21 financial year, or the previous year.

The report revealed that the Clarkes “had an interest which should have been declared in any agenda item pertaining to the charity” and that “other declarations of interest” made confidentially to the town clerk were not shared with auditors. 

Auditors also noted “significant concerns” over “potential income” from the Porthcawl Hub, a tourist information facility operated by the charity. 

The council paid one of the charity’s employees to manage bookings for Hub users, but there are no records of bookings or income declared for 2020/21.

PTC is under investigation by South Wales Police and Audit Wales, according to reports. The authority is also refusing to reveal details about the circumstances that led to the charity being awarded a £7,000 maintenance contract.

Auditing Solutions and Tracy Hill, mayor of PTC, declined to comment. 

Michael and Norah Clarke did not responed to a request for comment from Third Sector.

The Charity Commission confirmed the Credu Charity had been wound up. 

A spokesperson for the regulator said: “We are aware of concerns about the charity’s management in the past and have liaised with the liquidator on specific points. 

“We do not have an active role at this time, as the process must now be led by the liquidator.”

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