Police Investigation of Cheshire East Council

Cheshire East Council is being investigated by the NW Regional Organised Crime Unit. The external auditors have determined that they cannot formally conclude their audit and issue a certificate until the Police investigation reaches its conclusion. At the Audit & Governance Committee meeting on 29 September the auditors said that this could take years.

Background Information

A routine procurement audit commenced in 2015. This audit was expanded as a result of whistleblowing allegations into contracts awarded to Core Fit Ltd, a company run by the then Leader Cllr Michael Jones’s physiotherapist. Then the Chief Executive ordered an internal audit investigation reporting directly to him. In December both the Chief Executive and the external auditors said that no external investigation was required into the awarding of the Core Fit contracts, but then the Police launched an investigation and ordered the internal auditors at Cheshire East Council to stop work on their investigation.

Latest Developments

In a recent report to Cheshire East Council, the external auditors have recommended that the Council engage a suitably independent internal auditor to complete a rigorous and thorough review into procurement matters. In June/July the Chief Executive suggested that another local authority’s internal audit team reviewed the work carried out by Cheshire East’s internal audit team. Now the external auditors have said that the internal audit work should be completed and that the review should be overseen, directed and reviewed by a suitably independent internal auditor.

Steve Hogben, Labour Councillor for Crewe South, said, “The way the external auditors and the Chief Executive categorically stated that no external review was required is a matter for concern, but I am pleased that they have changed their minds. The results of this external review should be reported to the Audit & Governance Committee.”

Cllr Sam Corcoran, Labour Councillor for Sandbach Heath & East, said, “The independence of Internal Audit is a vital part of the culture of the Council. Staff must be allowed to carry out their duties with integrity and without fear of undue influence. I am pleased that the idea of involving the audit department of another council has been accepted. I hope that the Conservative Leader of the Council will recognise that it was a mistake to include Internal Audit within her own responsibilities and will move to correct any perception that she wishes to control Internal Audit.”  

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