MIDDLEWICH Town Council has been slammed over 28 failings regarding the way it handled taxpayers’ money over two years – and it could face a hefty VAT bill.

Auditor JDH Business Services found ‘numerous financial internal control weaknesses’ in the council’s accounts for 2017-18 and 2018-19 which have left the recorded figures ‘incorrect’.

Those findings included the council not being VAT registered despite income from business activity such as bar takings, sponsorships and gazebo hire exceeding the VAT threshold.

Town chiefs are now waiting to hear if they will be faced with a major bill as a result, which could be worth around £100,000, councillors were told.

Members at Monday night’s meeting agreed to act on a series of recommendations from auditor JDH Business Services to make sure the errors will not be repeated.

Cllr Gareth Williams, Labour, said: “In terms of drawing a line under the past – this is it. This is exactly why we did it, so we can start to rebuild.

Winsford Guardian:

“We are delighted that this report is concluded because it is only now that we can start building from where we were.”

Asked by a resident if the council could ‘rule out the potential of fraud or criminal activity’ at present, Cllr Williams added: “We can’t rule anything in or out, to be honest with you. There are a lot of unanswered questions.”

Members of the council committed to a thorough financial review in the first meeting following May’s election when Labour took all but one of its seats.

The council is now working with a VAT consultant to pore through the finances of 2017-18 and 2018-19, and it will have to resubmit the financial accounts it is required to provide by law with the correct figures.

Cllr Helen Watkinson, chairman of the council’s internal committee who has discussed the findings with JDH, told members that the two reports had ‘more than 50 per cent incorrect figures’ according to the auditor.

Other issues highlighted by the auditor include the failure to properly record financial transactions and the failure to seek quotes from three companies when purchasing equipment or entering into contracts – meaning the council has not proven it is spending taxpayers’ money prudently.

The council was signed up to financial regulations dating back to 2004 – meaning it did not have up-to-date rules to follow for online banking – while there was a lack of evidence European GDPR data protection rules were being followed.

JDH also criticised the way the FAB Festival budget, Victoria Hall accounts and the council’s reserves were recorded.

Cllr Watkinson added: “We did not have a good monetary control policy and that goes through lots of different regulations.

Winsford Guardian:

“Procurement, expenditure, income, contracts, sponsorship – all of those things did not have proper protocol. It was all ad-hoc.”

Some issues were kept confidential by the council and discussed away from the press and public on Monday night.

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Denise French, deputy town clerk, confirmed that the town council had already resolved several of the issues – and the council committed to following all the auditor’s recommendations.

Cash for a potential VAT bill will be earmarked in the council’s budget for 2020-21 when approved in January.