Highland Council fraud fears are being fuelled

Alarmed Highland councillors have warned staff could be tempted to commit fraud because of a flawed system for buying almost £4 million worth of fuel.

Some workers are failing to record petrol and diesel expenditure properly and auditors are concerned there is no way of knowing whether diesel or petrol has been used for unofficial use.

It has fuelled fears among members of the authority’s audit and scrutiny committee, including councillors Graham MacKenzie and Jamie Stone, who claimed the problems - coupled with the high price of fuel in the region – could entice employees to fill up vehicles for non-council business.

Bosses have now been ordered to urgently come up with an action plan to sort out the problems of accountability.

Staff fill up vehicles thousands of times either at the authority’s own depots or at garages around the Highlands, where they use 650 different fuel cards.

Most are Highland Council-owned but a small number of vehicles are hired, while fuel is also bought for small plant or machinery, like petrol strimmers.

The authority spends an annual £3.8 million on petrol and diesel but 1,300 "mismatched" reports - when the transaction for plant and equipment fuel did not tally with the card used - occurred between March to July 2012.

Most related to petrol for mowers and strimmers during the summer.

Explanations for each incident are sought but in the last six months a 100 per cent response rate was only achieved twice.

It was also discovered that 14,071 out of a total of 15,057 diesel transactions had no mileage or inaccurate mileages recorded between September 2012 and last month.

Nigel Rose, the authority’s head of internal audit and risk management, said the records were "wholly unacceptable" and inappropriate or fraudulent transactions could remain undetected because of the errors.

Mr Rose said no evidence had been found that fraud had been committed but admitted he could not offer a commitment it had definitely not occurred.

"No assurances can be given that no fuel has been used for unofficial purposes," said Mr Rose, who added talks with the two departments involved, TECS (transport, environmental and community services) and finance, had been held.

Councillor MacKenzie warned the system’s shortcomings could tempt cash-strapped staff.

"In times of austerity, we are putting temptation our employees’ way," said the Ross-shire councillor, who was concerned the problems were first flagged up two years ago but had not been sorted out.

Councillor Stone (Tain) said the cost of filing a tank hurt ordinary residents and claimed the public would be horrified by the shortcomings which "trashed the good name" of Highland Council.

"If we were a private business this would be wholly unacceptable and somebody would be carpeted," said the former MSP.

"People are feeling the pinch, it is not a good message to the public at all. It just trashes the good name of Highland Council, this kind of story."

Councillor Helen Carmichael (Aird and Loch Ness) said self-employed people recorded their mileage and fuels cost accurately all the time.

"Why can’t every vehicle on a Monday morning record its mileage?," she said. "I can’t see how it so difficult. This is a large amount of money we are talking about, £3.8 million."

TECS director Neil Gillies said the mileage was supposed to be recorded every time a vehicle was filled up.

"That is the bit failing," said Mr Gillies, who added fuel had historically been provided by its own depots but it decided to also start using local filling stations, partly to support the region’s economy.

"What we need to do is put the two systems together."

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