CIPFA suspends former s151 over investments

Another council finance officer has been disciplined by his professional body for financial mismanagement surrounding investments in Icelandic banks in the run up to the 2008 credit crunch.
The disciplinary committee of the Chartered Institute of Public Finance and Accountancy has announced it has taken action against Andrew Tremaine, previously head of financial services, director of corporate resources and section 151 officer at the now-abolished Restormel Borough Council in Cornwall.
The committee found that Tremaine had breached one or more of CIPFA’s guides to conduct, principles or rules.
It added that: “…by failing to follow applicable standards and failing to ensure, in accordance with those standards, that a proper framework of financial control was in place and operating effectively, he had conducted himself in such a way so as prejudicially to affect the status, reputation or welfare of the Institute and, by his misconduct, brought discredit on himself, the Council, the Institute and the profession of accountancy.”
A hearing in December heard that between 2006 and 2008 reports provided by Tremaine to councillors were unclear and did not provide enough information on the scale, nature and risks of planning investments. They also contained information and recommendations not in accordance with guidance issued by central government and CIPFA’s treasury management code.
In 2006/07, he was responsible for 26 investments which were found to be in breach of the council’s investment criteria. He also authorised nine investments totalling £14m in bodies which did not have the minimum credit rating required by the council’s policies, and authorised two which exceeded the council’s one year investment limit.
The following year, he was responsible for the council’s treasury management function when it made 14 investments in bodies which did not have the minimum credit rating required by the council’s policies, two which exceeded the one-year limit, four which breached limits for a single institution, and 15 where documentation was incomplete or inaccurate.
In addition, Tremaine had failed to implement a control framework to prevent investments breaching the council’s treasury management policies, the committee said.
Furthermore, he failed to ensure clarity regarding who was responsible for signing investments off and the level of challenge required by an authorising officer, and not ensuring breaches were recorded.
In relation to an investment in Landsbanki Islands which caused a loss of £4m loss to the council, the report said Tremaine had failed to present a “timely and comprehensive” report to councillors.
Imposing a 12 month suspension order, the committee said: “In reaching its decision the committee took account of the fact that the case involved wide ranging, continuing and sustained breaches of professional duties, that his failures resulted in a significant proportion of the council’s funds being placed at a level of risk that had not been accepted by the council, that responsibility for the failure primarily rested with him and that there was very little before the committee which indicated that Mr Tremaine appreciated the scale of his failures or the risk that flowed from them.”
It added that it had taken account of Tremaine’s previous good character and the fact that the misconduct was not dishonest and that he was “not well served by audit on which he placed significant reliance”.
In December, CIPFA disciplined three officers at North East Lincolnshire Council and one at at Bridgnorth District Council for financial mismanagement during the same period.