The Public Accounts Committee has cleared KPMG’s controversial head of audit, Gerry Acher, over his role as vice chairman of Motability, while his firm acted as consultants for the disabled car charity.
But the committee criticised the charity’s board for hoarding cash against the interests of its customers – building up a surplus of over £60m.
Acher said he was happy the committee had backed an earlier report by the National Audit Office, which spent a year investigating claims he failed to recognise conflicts of interest in his role as vice chairman.
Critics said Acher’s position was compromised when it was discovered KPMG acted as consultants to Motability between 1991 and 1995, while he was a member of the charity’s board.
They were also concerned that KPMG audited two of the six banks which provided leasing facilities for Motability.
The NAO said it found ‘no evidence of any conflict adversely affecting the charity’. But the PAC was asked to look into the matter when the NAO said it based its findings on a report by the Charity Commissioners. This report only examined whether Acher had gained personally from these relationships.
Motability told the committee KPMG charged for consultancy work ‘on average-scale rates less half – and at a rate which made no profit’. Motability also said on the last of the four years KPMG was used, the work was put out to tender and KPMG won, based on the same pricing policy.
Committee members were more concerned that Motability, which assists disabled people to buy or rent a car or wheelchair on favourable terms, failed to operate in the best interests of its customers. Members in particular noted the charity generated substantial surplus reserves from the charges levied on users – £61.9m above the £19.3m deemed necessary by the banks to safeguard the scheme.
PAC chairman David Davis said there was a degree of anxiety that one group of disabled people would be used to subsidise another.
In response, Motability said it was impractical to refund individual customers. A spokeswoman added that when surpluses now occur ‘they are used to reduce the cost of future leases’.
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