4 April 2010
The National Assembly for Wales is to ask the police to probe the handling of Wales Audit Office accounts by former auditor general Jeremy Colman.
Its Public Accounts Committee is also going to refer Colman and former WAO external auditor KTS Owens Thomas to their professional bodies over the matter.
A report from the committee found that Colman ‘decided that the standards of propriety and good governance that the office of auditor general should enshrine did not apply to him’.
Its decision to involve the police has sparked a row with Colman’s successor, Huw Vaughan Thomas, who said: ‘As I have made clear to the committee, the legal advice that I have received strongly suggests that the committee’s proposed action is unlikely to result in a successful prosecution.’
The committee’s concerns centre on a severance package agreed by Colman for the WAO’s former chief operating officer, Anthony Snow.
It said this was not properly disclosed because a commitment to make annual payments to Snow until his sixtieth birthday was not shown in the accounts for the year this was first agreed.
Instead, it was to be shown year by year as payments were made. This meant ‘expenditure was understated in the year in which the settlement was agreed, with corresponding overstatements spread over a number of future financial years’, the committee’s report said.
It said that if Snow’s severance package had been accounted for correctly, it would have been large enough to show up as unauthorised expenditure in a single year, so prompting investigation.
Colman instead gave instructions to finance staff that strengthened his ‘ability to shield the transaction from public scrutiny’.
This failing pointed to ‘deliberate actions on the part of Mr Colman to hide the full extent of Mr Snow’s severance package from appearing in the annual accounts’, the committee found. It added that he had ‘deliberately misled’ the Assembly.
Some other severance packages going back to 2005 had been misaccounted in a similar manner.
The committee also questioned why external auditors KTS Owens Thomas, ‘chose to accept what appears to be improper accounting treatment’. The firm’s contract was terminated by mutual consent in January.
Additional concerns were raised over Colman’s authorisation of £37,600 worth of training for himself and £39,700 for Snow, where the WAO had since been ‘unable to identify any business case, links to personal development plans or other justification’, the report noted.
KTS Owens Thomas declined to comment.
Colman was jailed for eight months last November for making and possessing indecent images of children.
