A FORMER chief executive of one of Scotland’s biggest council spin-off companies has been fined for soliciting “benefits” from a key supplier.
Three years ago Andy Clark quit his £105,000-a year post at Cordia, one of several arm’s length external organisations or Aleos set up to provide local services in Glasgow, amid a row about hospitality.
Now the 53-year-old has been formally reprimanded by his professional body, the Institute of Chartered Accountants of Scotland (Icas), after he was found to have have sought hospitality, a job for a family member and free car hire from a business during a contract re-negotiation.
Icas said Mr Clark “failed to adequately identify, evaluate, or manage threats to the fundamental ethical principles which arose through his conduct in connection with a supplier company, which was a key supplier to Mr Clark’s employer… and whose contract was being renegotiated at that time”.
The professional body has fined Mr Clark £3,000 and forced him to pay £2,000 towards the cost of its investigation.
The can reveal Icas acted after receiving a formal complaint about Mr Clark from Glasgow City Council, which has already dismantled Cordia and most of the other Aleos created by the former Labour administration more than a decade ago.
Back in 2019 the local authority handed what insiders called a “corruption dossier” to police after uncovering a procurement black hole running to more than one million pounds.
Investigators said they had found “serious cases of non-compliance and malpractice” at Cordia, adding that the Aleo was routinely overpaying on contracts with private suppliers that had not been reviewed for years.
In some cases the cost is understood to be 25 per cent more than could have been obtained through a Scottish-wide procurement system.
The investigators warned that unnamed individuals – more than one person – at the Aleo had “overridden normal management controls”.
Mr Clark only led Cordia, which provided home helps, school dinner staff and janitors to the council, for around 18 months.
Icas spelled out why it had chosen to reprimand Mr Clark, its member, referring to Cordia as “Company A”.
In an official judgment published on its website, it said: “The adjudication committee reviewed email correspondence which showed that the member received or sought from the supplier actual or potential benefits (e.g. a potential job for a family member, hospitality, and free car hire).
“Regardless of the level of the benefits, or whether they were ultimately received, the adjudication committee considered that it ought to have been clear to the member that, as a senior employee of Company A, he should not have placed himself in a position where a third party might reasonably perceive that he either obtained, or sought to obtain, benefits from a supplier who had a keen interest in maintaining favour with a contractor.
“In addition, Mr Clark engaged in email correspondence with the supplier regarding the renegotiation of the contract with the local authority. While Mr Clark argued that his involvement had no impact on the contract negotiations, the adjudication committee considered that any level of discussion should have been avoided.”
The email record dates from December 2016 to April 2017.
Under a second charge, Icas also found that in 2016 Mr Clark had “allowed corporate funds to be used to pay for a charity auction prize for use in a personal capacity”.
The prize was worth £1,000. Icas said: “If Mr Clark’s failure to repay the money was not intentional, it was extremely careless and/or reckless.”
Icas concluded that both breaches of the code of ethics of chartered accounts “were sufficiently serious as to support a finding of professional misconduct”.
It added: “In determining sanction, the Adjudication Committee noted that, with regard to the first charge, Mr Clark had accepted during the investigation that he ought to have acted differently.
“With regard to the second charge, it noted that Mr Clark has offered to repay the money to the local authority.”
Mr Clark, however, has not been struck off as a chartered accountant. He currently works as a director at an Ayrshire food wholesaler. The was unable to reach him for comment.
Local authorities routinely pass on the findings of their internal investigations to partner organisations, such as the police.
Auditors focus on reducing the risk to the public purse rather than punishing individuals who are red-flagged – and do not have the kind of investigatory powers enjoyed by the police.
A spokesman for Glasgow City Council said: “Our internal audit team launched an investigation at Cordia in May 2017, following a whistleblowing report.
“In April 2019, the city’s Finance and Audit Committee considered a report which detailed the override of normal management controls in relation to procurement and contractual matters over a number of years – which was highlighted in the head of audit’s annual governance statement later that year.
“It is normal practice for the council to share the findings of investigations with interested partners and regulators – for example, Police Scotland or Audit Scotland.
“Where necessary, we will also notify relevant professional bodies.”