'A huge amount of uncontrolled cash': Slough council purchase orders under scrutiny

A councillor has warned about the ‘huge amount of uncontrolled cash’ being spent by Slough council without proper prior authorisation.

At a meeting last week, councillors heard that, since April, Slough Borough Council has already spent £43million using retrospective purchase orders. 

Every time a council decides to spend money on goods and services, a purchase order (PO) should be raised to authorise the spend.

This should normally be done at the point a contract is awarded, but a report which went before Slough Borough Council’s audit and corporate governance committee on Wednesday, September 10, showed more than 2,500 orders have gone through retrospectively in the first four months of the financial year.

This means an agreement to spend the money is only reached at the point the council receives an invoice, rather than when the contract is awarded. 

In some cases, the original purchase order needs to be cancelled because it was raised incorrectly.

The meeting at Observatory House heard the council needed to carry out a ‘significant programme with all budget holders to remind them of their responsibilities to actually raise requisitions in accordance with their financial procedure rules’.

The chair of the committee, councillor Frank O’Kelly, said ‘we don’t want to shoot the messenger’ but asked that a purchase order policy is put in place for Slough.

Cllr O’Kelly (Lib Dem, Cippenham Village) said: “What we need from you [council officers] is an assurance that we’re going to put in place a policy which is non-optional, going forward, because a business, an organisation, cannot run like this.

“It’s uncontrolled and it shows a lack of governance.”

Cllr Robert Anderson (Lab, Birtwell) agreed and said the high figures were ‘a black mark’ for the council.

Cllr Anderson said: “Two-and-a-half thousand orders have gone out the door late, effectively, this financial year.

“This authority is pushing out £10million a month which hasn’t been properly authorised. That’s what should concern this committee.

“We’re not properly authorising expenditure and the council is massively overspending. Go figure.”

Cllr Subhash Mohindra (Con, Upton) was also concerned about the high number of retrospective POs for children and adults services as well as housing, considering the council is facing financial pressures from those services.

For regeneration, housing and environment, 1,481 purchase orders were retrospective.

The meeting heard how the council’s adult services has a separate system for managing its finances, without placing purchase orders.

But the council does have the ‘full disclosure’ of the invoices and payments being made each month.

For regeneration, housing and environment service, councillors were told the high volume of retrospective orders comes from a number of spot contracts, used to sell assets quickly, which are being placed at the moment.

However, the chair agreed with members and said the council needs to understand if ‘there is a handle’ on these purchases.

Cllr O’Kelly said: “I think there is an awful lot of work to do for the committee. We need to understand if there is a handle on this. That is a huge amount of uncontrolled cash.”