Unpaid invoices owed to Swansea Council worth £3.5 million have been identified by in-house auditors. They checked a sample of 30 unpaid invoices which were more than 90 days old, and therefore should have been sent to to the council's legal department to chase up, but found in 26 cases the process hadn't been followed.
It was then that they identified all unpaid invoices more than 90 days old - 4,470 of them - which totalled some £3.5 million. A report before the council's governance and audit committee said many of them were several years old and approaching their expiry date. It added that contact with debtors wasn't being followed up.
The report also found that insufficient effort was being made to address invoices classed as being in dispute. The shortcomings led to the council's accounts receivable section getting a "moderate" - or limited - assurance rating. Members of the committee were told at a meeting on June 15 that efforts were being made to improve the situation. You can read more stories about Swansea here.
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Lay committee member Philip Sharman said it was the second time a moderate assurance rating had been given for accounts receivable, and that he was concerned that more than half of the £3.5 million unpaid invoices were over a year old. "I think there is a real risk of a loss of income to the authority if that recovery effort does not work," he said.
Cllr Jeff Jones said he was disappointed with the £3.5 million figure. "My concern is that it has been left, and nothing has been done to chase those invoices up." He also asked if some of the unpaid invoices were from the same person or supplier, who he suggested might be tempted to not pay the council having done so before and not been chased.
Adam Hill, the council's deputy chief executive, said there was a process to follow regarding unpaid invoices but that it hadn't been identified early enough and progressed. All council directors, he said, had access to unpaid invoice information, and that there was a duty on departments to chase them up.
Mr Hill said 94% of invoices owed to the council were paid, but that leaders took the unpaid issue very seriously. He said recommendations made by the internal auditors were being developed into an action plan, with a timetable for delivery. "We have improved but not at the pace we would have liked it to have done," he said.
Ben Smith, the council's finance director, said one of his predecessors fined departments for not addressing unpaid invoices. He said the council could afford the sums involved in the short-term more than most, although he said the outlook for council finances was very challenging.
"But this is public money, we have got to recover as much as possible," said Mr Smith. "If it's not, it's ultimately a loss to the public purse."
During the meeting, Cllr Paxton Hood-Williams referred to ongoing audit work being carried out and asked why an audit of child and family services grants and contracts had been deemed as not required. An officer said there could be a number of reasons, and that he would find out and let him know.
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