Newham Council could set up an internal control commission to examine how it can better manage its finances in the wake of an £8.78million overspend in one department.
The plan, set to go before an extraordinary council meeting on Tuesday, January 22, involves an independent chair reviewing key areas surrounding the financial mismanagement in the repairs and maintenance service (RMS).
It will ask how the council can make itself a model of best practice for internal control and governance, and also examine how the council did not prevent issues in RMS from arising.
Councillors will consider a report, seen by the Recorder, which discusses the concerns raised by a whistleblower and the dismissal of staff members.
It explains: “This significant overspend of £8.78m was a result of RMS under-pricing its Keep Newham Moving highways activity and then failing to manage contractor costs resulting in increased capital costs to that originally budgeted for.
“This was a very serious and significant mismanagement of public money.”
The report also outlines “many instances of internal control failings” within the council, citing last year’s London Stadium decision-making process and the 2014 East Ham campus redevelopment programme as examples.
The release of the report comes after a members’ briefing, which took place on Thursday evening last week, saw councillors told of the scale of financial mismanagement within RMS.
The Recorder understands that information about the situation stretching back to 2013 was shared with councillors ahead of the extraordinary meeting.
Mayor of Newham Rokhsana Fiaz has spoken with the police about whether there are grounds to take the matter further.
She said: “This proposal aligns with my administration’s commitment to transparency, and improving the governance of the council in the interests of all Newham residents.
“We are putting things right. We have been proactive in resolving the financial mismanagement in RMS and taking clear action.
“I have instructed the new management team to implement a whole series of measures designed to offer reassurance on the effectiveness, governance, and efficiency of management.”
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