On 29 May I attended a meeting of Thanet Council Cabinet to ask questions about TransEuropa. At that meeting the Chief Executive sated that she had briefed the Chairman of the Governance and Audit Committee about the issue.
I understand that the Chairman of that Committee has stated that he has never been briefed by the Chief Executive about Transeuropa. I also understand that the Vice-chairman of the Governance & Audit Committee who attends all the briefing meetings with her Chairman agrees that she has never been advised about this issue. Furthermore, I understand that the previous Chairman of the Governance and Audit Committee has said that he was never briefed about the TransEuropa debt arrangement either.
I recently received a copy of a statement prepared by the Chief Executive of Thanet Council in response to the District Auditor request for her to comment on my questions about this affair. In this statement she says
"The position was also not reported specifically to Governance and Audit as part of the 2011/12 closure of accounts process as it was agreed with the auditors that as agreement had been reached over a debt repayment plan, there was no need to make explicit reference to the Transeuropa debt position within the accounts or make a provision for the outstanding debt".
So here's a conundrum the Chief Executive advises the Cabinet that she briefed the Chairman of the Governance and Audit Committee about Transeuropa. Then, in statement to the District Auditor, she says that the issue was not reported specifically to Governance & Audit. Dooohhhh!
What's going on here? This is all very odd especially because the Governance and Audit Committee plays a central and critical role in ensuring the good management of the Council finances. It's terms of reference require the committee -
To monitor the effective development and operation of risk management and governance in the council (e,g the risk management associated with allowing struggling Transeuropa to run up a debt of £3.4million);
To oversee the application of the council's governance arrangements for partnership activities where the council is the accountable body (e.g. the arrangement to allow an external partner - Transeuropa - to run up debts of £3.4 million with the Council);
To approve the annual Statement of Accounts. Specifically, to consider whether appropriate accounting policies have been followed and whether there are concerns arising from the financial statement or from the audit that need to be brought to the attention of the council (my concern would be the large debt with Transeuropa which Governance and Audit should have reported to Council, but which was not reported to Governance and Audit)
It seems to me that by not reporting the Transeuropa issue to the Council's Governance and Audit Committee the Committee's role has been undermined and it has been prevented from properly fulfilling its constitutional function. To describe this is an extremely serious issue would be an understatement.
Fortunately we will soon find out what has happened.
I understand that the Chairman of Governance and Audit is to put it mildly very "unhappy" about the difficult position the Chief Executive's ambiguous comments/ actions have placed him in.
He has therefore asked for Transeuropa be placed on the agenda of the next Governance and Audit meeting on 26 June, where no doubt the Chief Executive will be asked to give a full explanation about her mixed messages and apparent failure to report serious financial issues and risk to a body which is constitutionally charged to oversee these matters .
I have a feeling that lots of people might be coming to listen to this debate. My sources tell me that the meeting has been moved from a box room under the stairs at Fortress Fanet to the Council Chamber to accommodate the heaving throng. Shall I bring my camera to record proceedings. Perhaps not. Cabinet rules only allow the use of equipment that's accredited, Sadly my equipment has not been accredited for a while.