COUNCIL IN CRISIS • GRANTS SCANDAL

AFTER the publication of last week’s article “Council formally contact police”, The Herald received an undated letter signed by Gwyn Evans, the County Council’s European Manager.

In the letter, Mr Evans complains that “the juxtaposition of a photo of myself … might easily be taken to mean that I am myself under Police investigation.” That was not the Pembrokeshire Herald’s intention and we are happy to make that clear to our readers.

The Pembrokeshire Herald does, however, take issue with Mr Evans’ other assertion that he “did not tell Pembrokeshire County Council’s Audit Committee that there were no problems relating to the Commercial Property Grants Scheme or the Pembroke Dock Town Heritage Initiative.”

When this paper covered the Audit Committee on January 20, 2014, we sent our Assistant Editor and a junior reporter to cover the meeting. Part way through the committee proceedings, they were joined by the Herald’s editor. Before writing our story last week, we carefully checked our hand-written notes about what Mr Evans told the Committee members regarding the operation of grants schemes in Pembroke Dock. Aware that it is possible for an error to be repeated more than once, and in order to address Mr Evans’ concern that we had misreported his words we have consulted the transcript of a digital recording. We leave it to our readers to decide whether Mr Evans is correct in his assertion that he told the Audit Committee there were no problems with the schemes.

The transcript provides the context for the stark assertion which the Herald has highlighted in capital letters below.

On January 20, Mr Evans told the Audit Committee:

“WEFO (The Welsh European Funding Office) have their own internal audit team, they are required to have an internal audit team under the European regulations; it’s called the Project Inspection and Verification team, which we know as PIV. They come regularly to visit projects and check that everything is in order. They came to visit us in 2012 and issued a very good report.

“We were also visited at around about the same time, by WEFO’s external auditors, known as the Audit Authority, or the Welsh Government European Funds Audit Team (EFAT). They also issued a clean report. The visit carried out by PIV lasted two days, the visit carried out by EFAT lasted five days. EFAT carried out site inspections, I’m not 100% sure whether PIV did – they came and looked at documentation at the Bridge Innovation Centre in Pembroke Dock, and I think that they took themselves off into Pembroke and Pembroke Dock but there was no officer accompanying them, but EFAT, I accompanied the officer on a number of different occasions.

“The European Commission came, they have the right to carry out Audit Missions, as they call them, and they came in October 2012 and they also carried out a site inspection. They have also raised no concerns about this scheme. We are potentially subject to inspection by the European Court of Auditors, the European Commission’s external auditors, and potentially – IF THERE WAS A PROBLEM, WHICH THERE ISN’T – by the European Anti-Fraud office, which is known as OLAF.”

As background, it was following critical articles on the Pembroke and Pembroke Dock grant schemes in Pembrokeshire’s Best and on Cllr Mike Stoddart’s website (www.oldgrumpy.co.uk) that Gwyn Evans began the council’s damage-limitation exercise by producing an FAQ document.

That document sought to deny any possibility for fraudulent activity to take place, and to discredit the concerns that had been raised in the media.

This FAQ paper was included in a report by the council’s internal audit service to the meeting of the audit committee in September 2013: On the agenda at item 5.1.10 the minutes of the meeting record:

“Given the publicity the CPGS has recently received, the European Manager has also prepared a Frequently Asked Questions (FAQ) document that was published on the Authority’s internet site on the 4th June 2013. The European Manager stated “The FAQs seek to explain and clarify aspects of the scheme where misunderstanding has led to unwarranted negative publicity.”

In the FAQs document itself, Mr Evans stated:

“Q: Are there grounds to think that this scheme is a risk to the County Council? Have taxpayers’ funds been misappropriated?

A: These allegations are not supported by the findings of any of the numerous audits of this grant scheme.”

Based on the European Officer’s assurances, the internal audit report also concluded that the grant schemes had been subject to numerous audits and stated:

“. . . that there are adequate and effective compliance arrangements in place for both grant schemes, which have been complied with. This view has also been expressed by the Council’s Monitoring Officer.” Cllr Stoddart was not satisfied with these conclusions and put down a notice of motion calling for all information on these grant schemes to be made available to elected members on a confidential basis.

This led to the remarkable scenes at the meeting of full council on December 12 where the Cabinet member for the economy, Cllr David Pugh, launched a savage personal attack during which he accused the member for Hakin of telling “deliberate untruths”.

The Herald understands that Cllr Pugh’s tirade was based on information provided by a council officer with day-to-day control over these grant projects.

Unfortunately for Cllr Pugh almost everything he had been told was wrong and within a few days he was forced to issue an “unreserved apology” for one of his misstatements, though, when challenged by Cllr Stoddart about other inaccuracies, he replied that he could “see little value in continuing this dialogue”. When Cllr Stoddart asked the director of development for an explanation for Cllr Pugh’s errors, he was told that the officer who provided the information stood by what he had told the cabinet member, but that “it was entirely possible that some of the specific references could have been lost in translation.”

The issue then came before a special meeting of the audit committee in January where Mr Gwyn Evans made a presentation during which he again referred to the numerous audits that had been carried out.

For instance, he told the committee that the Wales European Funding Office had made regular visits including one in 2012 following which they “issued a very good report”.

Also the Welsh Government European Funds Audit Team had also paid a visit and “issued a clean report”.

Because the matter was before the audit committee, Mike Stoddart used the law on access to information to force the council to allow him to inspect all relevant documents.During this inspection he discovered irregularities in the tender process for a project at 10 Meyrick Street Pembroke Dock which he drew to the attention of the director of finance and the internal auditor and as a result the council had no option but to report the matter to the police.

Cllr Stoddart told the Herald: “It would seem that any ‘misunderstanding’ about the administration of these grants lies at the door of the council, not that of the Pembrokeshire Herald or me.

“As for the ‘negative publicity’ that the FAQs document was designed to avoid, the involvement of the Police is about as negative as it could get.”

The Pembrokeshire Herald would have been happy to give Mr Evans the opportunity to respond and explain his recorded remarks, but his letter to us bore no return address or contact details to enable us to do so.

Mr Evans’ letter in full

DEAR SIR,
I WRITE regarding the article “Council formally contact Police” in your February 21 edition.

Contrary to your article, I did not tell Pembrokeshire County Council’s Audit Committee that there were no problems relating to the Commercial Property Grant Scheme or the Pembroke Dock Townscape Heritage Initiative. My position is therefore not at all “difficult”.

The justaposition of the photograph of myself, which fills 40% of the column space of the article, beneath your headline might easily be taken to mean that I am myself under Police investigation.

To be clear, I am not under investigation by the Police or anyone else. I greatly resent your inaccurate report that I misled the Council’s Audit Committee and the scurrilous insinuation that I have been been involved in fraudulent activity.

GWYN EVANS
European Manager
Pembrokeshire County Council