Folk Festival Report is Truly Shocking

I’ve just finished reading the Council's report on the Folk Festival fiasco – it appeared on the website at about 5pm, and I didn’t get to see it in advance. I have to say some of the findings of the report are truly shocking.

• Despite its complexity, there was no project plan for the Folk Festival indicating dependencies of the various tasks and key responsibilities.
  
• Perhaps related to this, despite awarding the contract in Dec 2007, legal services were consulted late, given insufficient time to consider the agreement, and a decision was made to proceed with an incomplete (contract?) document on a Friday because tickets needed to go on sale on the Sunday.
  
• This decision was taken without escalation within the service lines. The Head of Legal services should have been consulted anyway due to complexity of the contract, but he wasn’t.
  
• There was no checking of the adequacy of the contract specification in either 2007 or 2008, in both occasions resulting in insufficient protection in relation to payment arrangements.
  
• Key evidence to support compliance with contract procedure rules, such as results of evaluations was not available. 
  
• After failure to carry out satisfactory financial viability checks, the finance department stated that the contractor should not be appointed, but this advice was ignored.
  
• Despite problems with the system in 2007 concerning the functioning and performance of the system, there wasn’t proper testing of the system in 2008.
  
• The Council was paid late in 2007, 4 ½ weeks after the festival. Despite 2008 funds being due by 11 August, the legal department wasn’t notified until 30th September.
  
• It appears that the Council didn’t even know how much it was owed. Only a rudimentary reconciliation was carried out in 2007, and it looks like when a detailed reconciliation was carried out for 2008, the amount owed is now stated as £644,951 rather than the £618,000 previously reported.
  

All very damning, but it leaves many more questions unanswered.

If the Council’s procurement rules weren’t followed how do we know that the contract wasn’t improperly (as opposed to incompetently) awarded?

And not even knowing how much was owed is just incredible – if the company had just handed over £618k, would the Council ever have discovered it should have been paid nearly £645k?

The report also focuses very much on the financial controls and how they operated – it says little about oversight of those controls by senior management, who have ultimate responsibility for looking after the Council’s assets, and who therefore need to be confident that suitable controls are not just in place, but that they are working effectively. Where was the oversight? What have the external auditors said about the financial controls operation at the Council?

How can a report prepared by internal staff members be described as independent? (contrary to promises to opposition Councillors that a full independent review would be carried out) – particularly as the report doesn’t currently include the results of the external review by PricewaterhouseCoopers.

And I think how the Council has reacted since the problem came to the attention of senior management will need to be subject to another investigation when we know how much if any of the cash missing will ever be repaid.

And yet despite all this, and with knowledge of the problems affecting the Folk Festival and the money at risk in failed Icelandic banks, the Audit Commission in its comprehensive performance assessment rated the council as excellent, saying its “Financial management is strong and there is good medium-term planning to make sure the council stays focused on its priorities.” How on earth can this be the case?

The ruling Liberal Democrat group have a record of failing to challenge decisions in public, preferring to nod just about everything through without debate. I hope there are some serious questions being asked behind closed doors about the performance of the Executive Councillor for Arts and Recreation, and her role in this fiasco. Ticketing arrangements for the Folk Festival have been the subject of repeated questions from opposition Councillors in the Council chamber, yet there is scant evidence in the report of any meaningful involvement from the Councillor with Executive responsibility in this complex and politically sensitive procurement exercise in 2008. Asleep on the job would be one way of putting it – I hope we will be seeing some responsibility taken by the ruling group for their catastrophic failures to look after Council taxpayers funds.