Who audits the internal auditor’s external auditor?

“The auditor of wine retailer and supplier Conviviality could face questions over its role in the company’s collapse.

The Financial Reporting Council (FRC) confirmed to City A.M. that it was “looking closely at the reported accounting issues at Conviviality”.

“If the relevant threshold tests are met in relation to accountants at the company and/or its auditors a formal investigation may be opened,” a spokesperson said.

This follows two profit warnings from Conviviality last month which it said had stemmed from accounting errors.

The first was blamed on an arithmetical mistake, while the second related to an unpaid tax bill.

The company ceased trading on London’s junior market prior to the second announcement, and scrambled to form a rescue plan as its cashflow was hit.

After unsuccessful attempts to save the company with a fundraising backed by drinks giant AB InBev, the company appointed administrators early this month.

Its direct business Matthew Clark Bibendum was sold to Magners Cider owner C&C, while its retail arm which includes Bargain Booze and Wine Rack was sold to Bestway for £7.5m.

Chief executive Diana Hunter stepped down in the midst of the scandal, but she and other board members have faced criticism for a fast-paced acquisition-focused strategy.

The FRC has the power to fine auditors it finds to be substandard, though its powers are set to be reviewed by the government following concern that the bar for misconduct is set too high.”

http://www.cityam.com/284451/kpmg-could-face-questions-auditor-watchdog-after

City faces corruption crackdown as IMF investigates wealthy countries

“The City of London will come under the spotlight of the International Monetary Fund as part of a crackdown on corruption that will investigate whether Britain and other rich countries are taking tough enough action against bribery and money laundering.

In a hardening of its approach, the IMF said it needed to look at those giving bribes and financial centres that laundered dirty money as well as improving the existing clampdown on wrongdoing in poor countries.

London has won the unenviable reputation of being the global centre for money laundering, partly as a result of cases such as the Global Laundromat, under which British-registered companies and banks helped move at least £20bn of money from criminal activities out of Russia.

AdvertisementHide
All members of the Group of Seven industrial nations – Britain, the US, Germany, Japan, France, Italy and Canada – together with Austria and the Czech Republic will be looked at by the IMF to see whether their legal systems criminalised bribery and have the right mechanism to prevent laundering of dirty money.

Christine Lagarde, managing director of the IMF, said: “The flip side of every bribe taken is a bribe given. And funds received through corruption are often funds concealed outside the country, often in the financial sectors of major capitals. It is quite possible for countries to have “clean hands” at home but “dirty hands” abroad.

“To truly fight corruption, therefore, we need to address the facilitation of corrupt practices by private actors. To do this, we will be encouraging our member countries to volunteer to have their legal and institutional frameworks assessed by the Fund – to see whether they criminalise and prosecute foreign bribery and have mechanisms to stop the laundering and concealment of dirty money.”

Lagarde said the willingness of the G7 plus Austria and the Czech Republic to allow their anticorruption regimes to be tested was a “a major vote of confidence in the new framework”.

The investigation will form part of the annual Article IV health check that the IMF conducts on every member country. Philip Hammond said in Washington that the size of the City of London meant he could not definitively say that there was no illicit money flowing through the UK financial system but that the government was working hard to reduce and eliminate illicit flows.

Lagarde said there was empirical evidence to show that high levels of corruption were linked to significantly lower growth, investment, foreign direct investment and tax revenues.

A country that slid down from halfway to three-quarters of the way down a league table of corruption and governance was likely to see growth of national income per head decline by half a percentage point or more.

“Our results also show that corruption and poor governance are associated with higher inequality and lower inclusive growth.” …”

https://www.theguardian.com/business/2018/apr/22/city-faces-corruption-crackdown-as-imf-investigates-wealthy-countries

Flagship Tory council may turn red due to councillors’ cosy relationship with developers

Owl says: If every Tory council with cosy relationships with developers turned red there wouldn’t be any left!!! Tory/developer, horse/carriage!!!

“It is the Conservatives’ local government flagship, blue since its creation in 1965. But in Westminster, amid a growing row about the influence of property developers, next month’s local elections are starting to look a bit tight.

In the ward covering London’s West End, some of the priciest real estate in Europe, two of the three sitting Tory councillors have been ousted by the party after opposing a wave of new building, which they say is overwhelming the area.

One of the councillors, Paul Church, said he had “tried to stand up for the communities I was elected to represent against the dominance of property developers and their agents, patronage and power in Westminster” but he had been “bullied, silenced and threatened by their powerful allies. Local government shouldn’t be like this.”

The other, Glenys Roberts, who has represented West End for 19 years, said: “I have tried to find out why I was deselected and they won’t tell me, so I feel as if I’m in a Kafka novel.” She said she had protested against “too much demolition” in Soho, part of her ward, adding: “If you completely get rid of the loucheness and the interestingness, do you just get rid of Soho and the reasons that anybody would ever come there?

“These are the issues I was very deeply involved with. They [the council leadership] didn’t like me being involved with State of Soho [a local group that campaigns against overdevelopment], but I just wanted the best for my area and the people I represent.”

Soho, a small area made up mainly of 18th and 19th-century houses, faces almost 20 large development schemes. Seven involve significant demolition of historic buildings, including the former Foyles bookshop in Charing Cross Road, a plan described by Historic England as doing “substantial harm” to the Soho conservation area.

The row will reopen concerns about developer influence at Westminster council, whose former deputy leader, Robert Davis, accepted more than 500 gifts or freebies, 150 of them from developers, while chairing the committee that decided on some of their planning applications.

Even the council leader, Nickie Aiken, admitted to The Sunday Times: “I do recognise that there was an historic issue in Westminster with the perception of these relationships. To date I have found no evidence of any wrongdoing or impropriety… [but] Westminster city council under my leadership will reassure residents about the integrity of the planning process.”

Davis left the planning job last year and “stepped aside” as deputy leader last month after it was revealed that he had taken gifts, meals or hospitality 514 times in three years, including nine free foreign trips, tickets to dozens of West End shows and hundreds of meals at top restaurants including the Ivy, the Ritz and Sexy Fish. He referred himself to a standards investigation but denies any wrongdoing and has been selected to stand for re-election as a Conservative.

In Mayfair, another part of her ward, Roberts said that “a lot of the rules [the council] have for keeping conservation areas in the right proportions and all the rest of it were being totally overruled”.

She said that Davis had once told her to “shut up” about a development and a number of other councillors “have told me he has tried [to silence them]”.

A third councillor who has been deselected in a different ward said Davis had telephoned to threaten them with “consequences” for their council career if they publicly spoke against controversial planning projects in their ward.

Davis said last night that he “never discouraged anyone from raising legitimate objections or concerns” but had “advised Mr Church that it is often sensible to air concerns with officers and members prior to a committee hearing, so as to allow them to be carefully considered and, ideally, addressed beforehand”.

He “expressly” denied threatening anyone with any consequences for opposing a planning application.

Roberts also said pressure was put on Westminster’s planning officers to change their recommendations to favour certain schemes.

“I was rung up by one of the officers saying there were meetings being held behind the scenes, off the record, no minutes taken,” she said.

“He was asked to change his recommendation and he refused . . . [but] the recommendations were changed subsequently.”

Roberts did not accuse Davis personally of pressurising officers and Davis said he had never asked any officer to change a recommendation.”

Source: Sunday Times (pay wall)

Claire Wright fights for proper scrutiny and transparency at DCC

Owl says: it beggars belief that (a) councillors are banned from asking public experts any questions and (b) minutes do not reflect PUBLIC anxieties!

And what would we do without INDEPENDENT councillors like Claire Wright!

“A recommendation will be put before Devon County Council Chairs of Scrutiny Committees on relaxing the rules around asking questions of members of the public, following today’s Procedures Committee meeting.

I proposed that there should be flexibility in the rules relating to public speaking in allowing questions from councillors on the committee. This was after I was prevented from asking a local GP a question following his submission relating to concerns on care at home, at January’s Health and Adult Care Scrutiny Committee meeting.

There was some discussion at today’s meeting and it emerged that other scrutiny chairs (Cllr Rob Hannaford in this instance) exercise discretion for points of clarification. I asked that this be made into a formal policy and it was agreed that the issue would be put before the next Chairs of Scrutiny meeting, which I will attend and make my case.

It is difficult to see a reason to argue against this modest change! My proposal to reduce the length of time that members of the public must register, from four days to two days, was not supported, unfortunately.

BETTER RECORDING OF PUBLIC SUBMISSIONS IN MINUTES BACKED

However, my request for more detailed recording in the minutes of members of the public submissions was backed by the committee this morning – after a bit of persuasion! This is important for the sake of balance. I argued that the committee exists to investigate matters of public concern. And it’s also important for the audit trail if the local health service did (heaven forbid) catastrophically fail and the health scrutiny committee was held to account.

Currently, the NHS presentations are recorded in detail, but members of the public representations are so glossed over in the minutes that no one would have a clue what their position was on the subject or what they said. With a simple tweak this will hopefully now be altered, which I believe more fully reflects what we are are here to do as councillors … which is represent members of the public.”

http://www.claire-wright.org/index.php/post/devon_county_council_public_speaking_changes_proposal_to_be_put_before_chai

Jeremy Hunt didn’t tell Standards Commissioner he had bought 7 flats from an “a cquaintance” who was also a Tory donor

“Jeremy Hunt received a “bulk discount” on seven flats bought from a Conservative donor, the Guardian can disclose, as parliament’s watchdog opened an investigation into the health secretary’s admission that he breached money laundering rules.

The health secretary was forced to apologise for failing to declare his part-ownership of a company, which bought the luxury seaside flats in Southampton.

Kathryn Stone, parliament’s commissioner for standards, received a complaint about Hunt on Friday. The commissioner’s website confirms that Hunt is now under investigation.

Guardian inquiries established that the 82-flat block, called Alexandra Wharf, was developed by Nicolas James Group, a south coast property firm owned and chaired by businessman and Conservative donor Nicolas James Roach.

Neither Hunt nor Roach agreed to disclose the value of the deal but a source close to the health secretary said he had received a “bulk discount” for buying multiple apartments.

A spokesperson for Roach said that all sales at Alexandra Wharf were at “open market value”, adding that the businessman’s political donations had been properly declared on the Electoral Commission website.

They added that the pair had known each other for “several years” but had no business relationship beyond the purchase of the flats.

A spokesperson for Hunt said: “The owner of the development is a long-standing acquaintance.

“Jeremy paid standard market rates which would have been available to anyone else making an equivalent purchase.

“As Jeremy has been clear from the outset, the rental income from these properties will be donated to charity.”

Roach has made more than £50,000 in donations to Hunt’s South West Surrey constituency office since 2011, mostly in the form of complimentary venue hire.

The pair were pictured together in 2011 at a party to launch a £60m hotel in Guildford, Surrey, that was developed by Nicolas James Group.

Sir Alistair Graham, the former chairman for the committee on standards in public life said: “In terms of public perception of ministerial priorities, Hunt seems more concerned with maximising his personal interests rather than ensuring that there are good public services.

“On a local level, there does seem to be an incestuous relationship between a local donor and a local politician in a way which will make the public uneasy.” …”

https://www.theguardian.com/politics/2018/apr/18/jeremy-hunt-investigated-breach-money-laundering-rules-luxury-flats

Yet another Conservative-run Council seems to be facing bankruptcy – and this time it’s in a Tory Minister’s OWN Constituency

“There is a massive budgetary disparity at the heart of Tory-run Worcestershire County Council. The council, which includes Housing and Communities Secretary Sajid Javid’s constituency, has, it seems, sought to bury a damning review of its finances carried out by the Chartered Institute of Public Finance and Accountancy (CIPFA).

Worcestershire’s forecast increase in demand for services was 2.5 times larger than its expected growth in resources. The CIPFA has warned the council that they face a £26.4m hole in their finances in 2018-2019, which looks to rise to £60.1m in 2020-2021.

The shadow Housing and Communities Secretary, Andrew Gwynne MP has noticed the pertinent similarities between the situation in Worcestershire CC and Tory-run Northamptonshire County Council’s bankruptcy:

“This Government has utterly failed local government, forcing many authorities to struggle to maintain basic services after cutting their funding to the bone. The National Audit Office and the IFS are calling for a change in direction, one of the Government’s own councils has gone bankrupt, and now with this mess happening in the Secretary of State’s own Council – how much longer can Sajid Javid ignore this crisis?

Almost eight years of Tory austerity clearly isn’t working. It didn’t work for Northamptonshire, and it’s not working for Worcestershire. We need to elect as many Labour councillors as possible on 3 May to stand up to the Conservatives’ cuts.”

A reduction of 47% in the council’s usable reserves over the last 5 years, as well as overspending on children’s services, has seen the Worcestershire CC looming over a prospective £60m black hole.”

https://evolvepolitics.com/yet-another-conservative-run-council-is-facing-bankruptcy-and-this-time-its-in-a-tory-ministers-own-constituency/

A DCC meeting tomorrow that will show if democracy is dead or alive at the council

From the Facebook page of Claire Wright:

“PROCEDURES COMMITTEE TO DEBATE RELAXING PUBLIC SPEAKING RULES, TOMORROW
Devon County Council’s Procedures Committee will consider my proposal to relax public speaking rules at committee meetings, at tomorrow morning’s meeting.

I asked for the agenda item, following the January Health and Adult Care Scrutiny Committee meeting, where I was prevented from asking a question of Dr Mike Slot, Sidmouth GP, who had addressed the meeting about his concern that care at home may not be working as effectively as it should.
Care at home is the system which replaced the loss of many community hospital beds, 72 of which closed locally last year.

Across Devon, around 250 community hospital beds have been shut since 2012.
Up until 2016 there was no public speaking at scrutiny committee meetings which was quite wrong, especially for Health Scrutiny as the committee’s remit is to take up matters of public concern.

The lack of public speaking resulted in frustration from members of the public who heckled and shouted when they heard the NHS representatives say things they disagreed with, or believed were untrue.

In February 2016, Devon County Council unanimously backed my proposal to bring in public speaking at scrutiny meetings…. and they have functioned much more democratically as a result, following this decision.

However, there was a problem in January, where I was prevented from asking a question from a Sidmouth GP who had addressed the committee with concerns about care at home on the basis it was contrary to standing orders.

The upshot of the refusal was that the committee would have simply have allowed Dr Slot to walk out the room without further information or investigation, if I hadn’t then proposed a spotlight review into the issue.
So that’s the background to tomorrow’s meeting.

I have also asked for some flexibility on the issue of members of the public needing to register four days ahead of the meeting to speak.

Again, at the January meeting, this rule resulted in one member of the public speaking, leaving other members of the public who hadn’t managed to register in advance, unable to speak! There was nine minutes left of time too. What a waste of an opportunity to hear members of the public’s views.
To me these are simple issues and matters of common sense. We need to enable members of the public to participate, not get stuck behind the bureaucracy. I will see how the rest of the committee views it…”