Hart’s lack of financial control has also infected the Garden Community project. Their accounting for Shapley Heath has descended into a shell game. They set a zero budget, then we have to guess where they have hidden the actual spending. Let’s go through it.
Shapley Heath Zero Budget
Hart recently published the final budget for the current financial year. This also included the budget for last year, FY20/21. The budget for the new settlement at Shapley Heath was set at zero as can be seen in the image below. Note that in public sector accounts, positive numbers are spending and negative numbers are income.
It was made up of ~£68K for employee costs and car allowances, offset by a somewhat implausible identical receipt from GL Code 44047 – Consultants Projects. It is not clear why they were expecting consultants to pay them money. In common with the other service areas, no overheads were allocated.
Shapley Heath Declared Spending
Yet, the transparency report shows spending of £63.7K on consultants in “New Settlement” for FY20/21:
It is not clear how they managed to authorise this spending against a zero budget. On the face of it, it’s contrary to the Constitution. Budget regulation 3 limits spending to within the approved budget:
Budget regulation 5 allows transfer between budgets.
But this is limited by Financial Regulation 12 to £10,000 without Cabinet approval or £50,000 with Cabinet approval. We can find no record of Cabinet approving a change in the budget for Shapley Heath. In any event they have spent more than the transfer limit.
In addition FR10 says that they cannot incur unbudgeted expenditure without approval of full Council.
So, even the spending of the £63.7K appears to be in breach of the Constitution.
Shapley Heath Additional Work
Furthermore, the Shapley Heath Opportunity Board papers show that four Baseline Studies had reached the status of “Finalised” by 8 March. This is before the end of the financial year. These must have cost money, but do not show on the Transparency Report nor on the Contracts Register.
So, they have spent an unknown, but large amount of our money against a zero budget.
Shapley Heath Financial Shell Game: Transfer from Reserves
We can get an idea of how much they actually spent from the report recently presented to Cabinet. Buried on page 108 is an analysis of funds transferred from reserves.
This shows £283K was transferred from reserves for “funding 2020/2021 work on the New Settlement at Shapley Heath”. Note that the same report says that they incurred a deficit of £784K in the financial year (p103).
We will be asking questions at Council next week about how it was possible to spend £283K against a zero budget while running a massive deficit. Hart are fiddling while burning our money.
The questions can be found here.