RegulationCorporate GovernanceNo showdown after GLA forensic audit

No showdown after GLA forensic audit

Forensic audit of GLA proves to be a damp squib and reveals 'ineptitude rather than corruption'

It was billed as the smoking gun. The London press were primed. The former
mayor, Ken Livingstone, and his deputies, were braced.

But the report of the Forensic Audit Panel, set up by new London mayor Boris
Johnson, into mis-spending by the Greater London Authority, and in particular by
the London Development Agency, has proved something of a damp squib.

WHAT HAPPENED?
Following a series of allegations about the involvement of Livingstone’s adviser
Lee Jasper in securing funding for projects he was involved with, Johnson
appointed Patience Wheatcroft, the former Sunday Telegraph editor, to
conduct a ‘forensic audit’.

Aided by PricewaterhouseCoopers partner Andrew Gordon and a host of other
(mainly Tory) notables, the panel released its report last week.

It identified savings that could be made at the GLA, from cancelling
projects, such as the Rise festival, by ‘rationalising’ foreign embassies set up
by the previous mayor, and through other overlaps.

But it was at the LDA that the report was really expected to hit home.

What it in fact drew attention to was failures in monitoring projects and
spending: ‘We understand that the LDA’s internal auditors, who currently provide
internal audit services to the LDA, have not been asked to visit any projects as
part of their work,’ said the report. It reiterated that there were question
marks over some projects.

In interviews, Wheatcroft also said that she thought ‘tens of millions’ had
been wasted, and that the body had been used as ‘The Mayor’s chequebook’.

WHAT’S GOING TO HAPPEN?
Politically, the fallout seems limited: the panel admitted that it found
ineptitude rather than corruption.

And as Livingstone said, if he and his colleagues exerted pressure on the LDA
to deliver projects they were interested in, that could partly be defended as
part of the democratic process.

‘The electorate select a mayor whose values they share and judgment they
trust, and then it is up to that person to get on and take decisions for London.
If you don’t like those decisions you can be pejorative and call them “whims,”
or you can say that the mayor is setting our strategic priorities,’ he said.

But some forensic scrutiny will go on. KPMG, alongside DLA Piper, are
considering some high-risk projects to see if there has been any criminal
activity.

Jasper was warned by Wheatcroft that his involvement was still to be
investigated by the police, and that he should not feel exonerated.

The battle to get to the bottom of what did or did not go on at City Hall
looks set to go on for some time yet.

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