Coleg Gwent
Fact Finding Report 2014/15
Usk Equine Centre
Distribution List:
Final Report
Vice Principal (Finance, Estates and Information Services)
Date of fieldwork:
Date of draft report:
Date of final report:
November 2014 to January 2015
January 2015
February 2015
This report and the work connected therewith are subject to the Terms and Conditions of the letter of
engagement dated 25 November 2014 between Coleg Gwent and Deloitte LLP.
The report is produced solely for the use of Coleg Gwent for the purpose of providing internal audit
services. Its contents should not be quoted or referred to in whole or in part without our prior written
consent except as required by law. Deloitte LLP will accept no duty or responsibility to any third party,
as the report has not been prepared, and is not intended for any other purpose.
This report has been prepared on the basis of the limitations set out at Appendix C.
Coleg Gwent – Fact Finding Investigation – Equine Centre
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© 2015 Deloitte LLP
Contents
Page
1.
2.
EXECUTIVE SUMMARY ........................................................................................................... 1
1.1
Introduction ........................................................................................................................ 1
1.2
Agreed Investigation Plan ............................................................................................... 1
1.4
Restriction of Use.............................................................................................................. 5
1.5
Acknowledgement............................................................................................................. 5
OBSERVATIONS AND RECOMMENDATIONS................................................................... 6
2.1
DIY Livery Services Records .......................................................................................... 6
2.2
Records of Loaned Horse Usage................................................................................... 7
2.3
Facilities Booking Segregation of Duty.......................................................................... 8
APPENDIX A – REPORTING DEFINITIONS................................................................................... 9
APPENDIX B – EXTRACT OF LETTER OF ENGAGEMENT 25 NOVEMBER 2014............. 10
APPENDIX C – STATEMENT OF RESPONSIBILITY ................................................................. 11
Coleg Gwent – Fact Finding Investigation – Equine Centre
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1. Executive Summary
1.1
Introduction
This report summarises the fact finding work that has been conducted in respect of a concern raised by the
family of a College Employee received by the College’s Principal on 4 November 2014 (the ‘Allegation’). The
allegation relates to inappropriate provision of livery services and facility hire at the Equine Centre, at the
Usk Campus by an employee of the College (the ‘Subject’).
The Allegation detailed concerns that the Assistant Yard Manager (who had previously held the post of
Acting Yard Manager while the Yard Manager post was vacant) was abusing her position by allowing a
College Lecturer to receive livery services which were not paid for, and using College facilities for a local
Pony Club (the ‘Pony Club’) for whom she was on the organising committee.
Additional allegations were raised relating to theft of student clothing, and a failure to work contracted hours,
however in order to focus on the key allegations these were not included in the scope of this fact finding
investigation.
1.2
Agreed Investigation Plan
The letter of engagement (an extract of which is included at Appendix B to this report) requested our work
cover the following points:
•
•
•
•
•
Meet with the source of the allegations being investigated, to obtain better understanding of their
concerns detailed in their email to the College Principal.
Discuss previous related reviews of the Usk College Equine Centre administration performed by the
Pontypool and Usk Corporate Finance Team, in order to identify related concerns and understand the
operation of the Stables.
Obtain from Finance copies of all Usk Equine Centre invoices relating to facility hire covering a period of
one year in relation to the Pony Club, and seek to reconcile this against records of room bookings at the
Stables, and evidence of Pony Club events identified from their website.
Obtain from Finance copies of all Usk Equine Centre invoices relating to livery services and seek to
reconcile these records with records collected from the Equine Centre detailing the horses receiving
livery Services from the College.
Review emails you have informed us have been obtained by your IT department from the Subject of the
investigation for evidence of knowingly failing to bill for livery services and for evidence of the extent to
which the working day and college resources as being used for Pony Club administration
Dependent on the outcome of the above enquiries, we would support the HR department in interviewing the
Subject of the investigation, in order to obtain their account for findings arising from the above steps.
1.3
Investigation & Findings
Discussion with the source of the allegations
On 27 November and 5 December 2014 we emailed the source of the Allegation, a father of a colleague of
the Subject (the ‘Source’), without receiving a response. A third email sent on 8 December 2014 by the Vice
Principal (Resources & Financial Planning) was received by the Source who contacted us by telephone to
schedule a meeting. We met with the Source on 19 December 2014 at his home.
During the meeting the Source repeated allegations made in his email to the College Principal on 4
November 2014. The allegations raised include:
•
A College Lecturer’s horse (we have identified horses called ‘Eve’ and ‘Brook’ who are recorded as
being owned by the College Lecturer named and who have at times over the year been in receipt of DIY
Livery Services)) had stayed at the College but Livery Services had not been paid for. It was not clear if
this was for full livery services or “DIY” livery (e.g. accommodation and straw only).
•
A second College Lecturer’s horse (or relative of a College Lecturer, the Source was not certain) (‘Suzie)
had stayed in College facilities receiving full livery while being unsuitable for lessons (and so should not
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have been on the College premises or should have been there on a DIY livery basis, at a cost of £26 per
week).
•
On 31 October 2014 the Pony Club was booked to use College facilities but subsequently cancelled. At
4pm on the same day the Subject was seen teaching a private riding lesson at the College by the
Source’s daughter, an employee at the College’s Equine Centre, but this was not recorded in the
Calendar used to manage bookings and invoicing for facility hire.
•
Allegations of bullying against the Source’s daughter raised in his email dated 24 November 2014 were
repeated, however these are not part of the scope of our fact finding investigation.
DIY Livery Services
On 14 January 2015 we met with the Equine Centre Co-ordinator (the ‘Centre Co-ordinator’) The Centre Coordinator was not given advance notice of our visit, and during the course of our visit the Subject was not
present at the College. The purpose of our visit was described to the Centre Co-ordinator as being ‘part of
an audit’.
The Centre Co-ordinator explained to us that the College currently has three horses staying in College
Stables on a ‘DIY’ Livery basis, at a cost of £26 per week. It was explained to us that this service is not
advertised, and is typically used by College staff. Three stables are available for DIY Livery. On the date of
our visit the Horses present at the College did not include any of the horses noted in the Source’s
allegations.
The Centre Co-ordinator informed us that the DIY Livery includes provision of a stable, hay/haylage and
access to fields to exercise a horse, and College exercise facilities when these are not in use for College
purposes.
We were not able to identify historical records detailing what horses have stayed at the College on a DIY
livery basis in the past, as we have been informed by the Centre Co-ordinator these are not retained.
We have reviewed invoices provided to us by Finance that show for the period August 2013 to September
2014 invoices were raised by the College for DIY Livery of three horses every month. While we are unable
to confirm the accuracy of the invoices against records of horses staying at the College, we can confirm that
invoices have been raised for at least three horses every month during this period.
These invoices include invoices to a college Lecturer relating to the Horse ‘Eve’ from August 2013 to
February 2014 and ‘Brook’ from January 2014 to March 2014. ‘Eve’ and ‘Brook’ were not present on our
visit to the Equine Centre on 14 January 2015. The centre Co-Ordinator was not aware of historical records
detailing when DIY Livery horses have been present at the College in the past, so we are unable to verify
the completeness of invoices the College have passed to us, or the exact nature of the services provided to
each horse.
The DIY Livery Invoices passed to us, covering the period from August 2013 to September 2014 did not
include any reference to the Horse ‘Suzie’.
We also note that the Centre Co-ordinator informed us that there is not currently a contract in place with
owners of DIY Livery Horses. We were informed that the Equine Centre has requested a proforma contract
is prepared by the College’s Legal Advisors.
Conclusion 1
Due to the lack of records detailing when DIY Livery horses have stayed at the College in the past and the
services provided, we are unable to refute the allegations:
•
that ’’Eve’ and or ‘Brook’ had stayed at the College without payment, although we can confirm that
invoices were raised in respect of these Horses for the periods of time detailed above. We also note
that at the time of our visit on 14 January 2015 only three stables were used for DIY Liveries, and that
for the period August 2013 to September 2014 invoices were raised in respect of all three horses every
month.
Neither could we evidence that all horses on DIY livery have been invoiced appropriately, although we note
that invoices have been raised for three horses over the period August 2013 to September 2014, and at the
time of our visit only three stables were available for DIY Livery. Due to a lack of records of horse
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arrival/departure for DIY Liveries, we cannot rule out that additional stables have been used for DIY Livery
services that have not been invoiced.
We have raised one recommendation relating to the record keeping around DIY liveries in Section 2.1
“Loaned” Horses
At the time of our visit to the College on 14 January 2015 the Centre Co-ordinator informed us that there
were seven horses ‘loaned’ to the College on site, with an eighth due to return to the College at a future
date.
When a horse is loaned to the College, the College takes on responsibility for care of the horse with the
exception of Farrier bills (invoiced directly by the Farrier to the horse owner) and Vet’s bills in excess of
£100. During term time the horses are available to the College for educational purposes. During Christmas,
Easter and Summer Holidays owners can either pay £70 per week for full livery services, or take their horses
away from the College. The Centre Co-ordinator has advised us that typically these horses will be returned
to the College prior to the start of term so that they can be prepared (e.g. ridden) so that they are suitable for
student use at the start of each term. The Centre Co-ordinator was unable to recall for us the last time a
College Loaned horse was left at the College during College Holidays (excluding half term breaks, which are
not charged for).
During our visit on 14 January 2015 we noted that contracts were in place for all College Loaned Horses
present in the stables, however as records are not maintained confirming when horses are removed from the
College during College Holidays, we are unable to confirm if any loaned horses were at the College during
holidays and therefore incurring a charge for the owner.
The allegation made by the Source alleged that ”Suzie” was owned by a Lecturer at the College, or a
member of a Lecturer’s family, and was recorded as being loaned to the College but was not used for
educational purposes.
We were informed by the Head of School that ”Suzie” was removed from the College in September 2014.
During our visit to the Equine Centre, the Centre Co-ordinator informed us (while illustrating how horses may
be considered suitable to be loaned to the College or not with an anecdote) that ”Suzie” was initially thought
suitable for College use, however after two years on loan to the College it was deemed to be inappropriate
for use by students
We note that the College does not have in place detailed criteria for suitable horses to take on loan. The
Centre Co-ordinator informed us that this would be difficult to implement, as the College requires a variety of
horses to suit differing student requirements, so that should a vacancy arise, the College may need to
identify a horse suitable (for example) for inexperienced riders.
We did ask if records were held detailing how often horses were used at the College (and so demonstrating
that loaned horses were used for educational purposes), however we were advised that this is not recorded.
At the start of each day horses may be allocated to appropriate classes, however this allocation is not
routinely retained.
Conclusion 2
Due to the lack of records detailing Loaned horse use, we have been unable to refute the Allegation, nor
obtain evidence to demonstrate that all horses on loan to the College are used for educational purposes.
We have raised one recommendation relating to recording evidence of horse usage, which can be found in
Section 2.2.
Use of College Facilities
The Allegation states that the Subject performed activities related to the Pony Club during her contracted
hours at the College, and that the Pony Club used College Facilities, although rarely paid for these.
We discussed the procedures for using College Facilities with the Centre Co-ordinator. The Centre Coordinator explained that prior to September 2014 (approximately) bookings were made by
individuals/organisations wishing to use College facilities by contacting the Campus Director’s PA, however
due to operational difficulties (e.g. the Campus Director’s PA being remote from the Equine Centre, and not
available on evenings and weekends) the responsibility for managing bookings was passed to the Subject.
The Subject takes bookings for facilities and records these on an Outlook Calendar.
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The Outlook Calendar is then used by the Finance Officer at the Usk Campus to prepare an invoice
requisition (in the form of a spreadsheet). Invoices are requested bi-weekly, and our Subject is notified prior
to preparation of the invoice requisitions so that the facilities bookings calendar can be updated with any
amendments required.
We note that the current processes allow the Subject to make bookings for her own private lesson students,
and the Pony Club on the facilities booking calendar. As the calendar is then used by administrators, who
are based offsite to generate invoices there is a potential lack of segregation of duty in the booking/invoice
process. There is also a risk that the Subject could make a booking on the facilities booking calendar, then
delete the booking after it has taken place prior to the invoices being processed to avoid payment.
We have obtained details of Pony Club events scheduled to be held at the College, and compared these to
invoices sent to the Pony Club for facilities use and a copy of the facilities bookings calendar for 2014. We
note that during our discussion with the Centre Co-ordinator it was explained to us that the scheduled events
may frequently be cancelled due to a lack of members signing up to indicate they would be attending.
Our comparison found six events detailed on the Pony Club website in the period January 2014 to
September 2014 (the period for which we have both the facilities booking calendar and invoices for facilities
use) for which we could not identify invoices. We note, however, that none of these events were recorded on
the facilities calendar. This could be indicative of either cancelled events, or events deleted from the
facilities calendar to avoid invoicing.
In the period from August 2013 to October 2014 the Pony Club was invoiced for 59 event bookings, totalling
£2,392.
In addition to the above mentioned six events, we note one event on the Pony Club agenda was run jointly
with a third party organisation. The third party organisation mentioned is recorded in the calendar (and
annotated “invoiced”).
The Allegation did state that the Subject used College facilities to hold private lessons (noting one such
lesson took place on 31 October 2014). We note that the facilities booking calendar at the time of our visit
did not include a 4pm booking.
The Centre Co-ordinator informed us that facilities for private lessons would normally be invoiced to the
individual receiving the lesson.
Conclusion 3
Due to the possibility that published Pony Club events may have been cancelled, and the lack of audit trail to
document booked and cancelled facilities bookings, we are unable to verify the completeness of invoices
raised by the College, or refute that allegation that external bookings may have taken place but not been
charged for.
We have raised one recommendation in Section 2.3 relating to the facilities booking process.
Enquiries not noted above
In addition to our review of invoices raised, and interview with the Centre Co-ordinator we have performed a
spot check on horses at the College on 14 January 2015. During this spot check we did not identify any
horses for which there was not a loan agreement in place, or for whom a DIY livery invoice was not regularly
produced in 2014.
With the assistance of the College’s ICT Infrastructure Manager we have performed searches on inboxes of
the Subject and the owner of Suzie using the search terms ”Suzie” [Name of the Pony Club], “Pony Club”,
and “Livery”. During these searches we did not identify any emails relevant to this fact finding investigation.
We have met with the Pontypool and Usk Campus Corporate Finance Officer whom we were informed had
performed an internal review of processes at the Equine Centre in 2013. Notes from this meeting were used
to provide back ground information prior to our visit to the equine centre.
Next Steps
In our letter of engagement we have indicated that we would support the College’s HR department in
interviewing the subject of this investigation if appropriate. As we have not identified any evidence to
support the Allegation or fully refute it, we do not propose to support an interview with the Subject unless
further information comes to light.
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1.4
Restriction of Use
We wish to draw to your attention that this report may only be used in accordance with our contract and
may not be made available to third parties, except as may be required by law.
1.5
Acknowledgement
We would like to thank the staff who participated in this internal audit for their assistance and co-operation.
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2. Observations and Recommendations
2.1
DIY Livery Services Records
Recommendation
It is recommended that the College implements a
robust process to maintain records of horses/owners
using the College’s stables for ‘DIY Livery Services’.
This should include signed agreements detailing
appropriate terms and conditions for the College and
the horse owner, and records of arrival/departure(s).
Once implemented, unannounced spot checks could
be used to verify completeness of records.
Rationale
Priority
An allegation has been raised that a College employee has received DIY Livery
Services for which she has not been invoiced.
Due to the lack of contemporaneous records of DIY Livery Services Provided, we have
not been able to confirm the accuracy of this allegation as historical records of DIY
Livery are not maintained.
There are not currently contracts in place documenting agreements made with horse
owners for horses currently residing at the College on a DIY Livery basis.
We do note that invoices raised in September 2014 do correspond to horses at the
College during our visit on 14 January 2015.
Management Response
Agreed. New procedures will be developed and implemented at the Equine centre in line with this recommendation
Responsibility/
Deadline
VP (R&FP)
April 2015
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2.2
Records of Loaned Horse Usage
Recommendation
It is recommended that the College retains records to
demonstrate that Loaned horses are used by the
College for educational purposes.
Once implemented, unannounced spot checks could
be used to verify completeness of records.
Rationale
Priority
We identified that records are not maintained recording use of horses loaned to the
College.
One of the allegations raised is that a member of staff was permitted by the Subject to
receive full livery services without being charged.
Without appropriate records
demonstrating that horses loaned to the College (at no cost to the horse owner) are
actually used by the College, we are unable to locate evidence to refute this allegation.
Management Response
Agreed. This will be reviewed and appropriate procedures developed and implemented at the Equine centre in line with this recommendation
Responsibility/
Deadline
VP (R&FP)
April 2015
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2.3
Facilities Booking Segregation of Duty
Recommendation
It is recommended that the College considers the
processes in place for booking Equine Centre facilities
to enforce segregation of duties over the invoicing
process.
This could be achieved by removing Equine Centre
Staff’s ability to edit the Outlook Calendar used, and
require all bookings to be notified by Equine Centre
Staff to an independent employee of the College (e.g.
via email).
Rationale
Priority
We identified that the Subject of our investigation maintains an Outlook Calendar of
facilities bookings. This calendar is then used by a remote Finance Officer to create
invoice requisitions on a bi-weekly basis. The Subject of this investigation may make
bookings for facilities usage for either a Pony Club for whom she sits on the
Committee of, or for individuals for whom she provides private tuition.
There is a risk that the Subject may be able to remove bookings for facilities usage in
the Outlook Calendar after the event, without an audit trail being created and with no
third party involvement, and so avoid charges for usage.
Once implemented, unannounced spot checks could be
used to verify completeness of records.
Management Response
Agreed. We are currently reviewing the use of alternative software for administering Equine centre bookings and will implement this alongside
new robust booking and invoicing procedures
Responsibility/
Deadline
VP (R&FP)
April 2015
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Appendix A – Reporting Definitions
Grading of Recommendations
In order to assist management in using our reports, we categorise our recommendations according to their
level of priority as follows:
Priority Level
Definition
Recommendations which are fundamental to the system and upon which the organisation
should take immediate action;
Recommendations which, although not fundamental to the system, provide scope for
improvements to be made; and
Recommendations concerning issues which are considered to be of a minor nature, but
which nevertheless need to be addressed.
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Appendix B – Extract of Letter of Engagement 25 November 2014
1
Scope and Objectives
We understand that you wish to appoint us to complete a Fact Finding Investigation (your “Objective”).
You have asked us to provide the Services set out in Section 2 below and to prepare the report described in
Section 2(d) for your internal use (the “Purpose”).
For the purposes of this contract and any Scope Document all references in this Contract to “Client” or
“You” shall be construed as referring to Coleg Gwent.
2
Our Services and Responsibilities
a)
The scope of our work will be limited to the tasks set out in the Proposed Investigation Strategy.
b)
Our Engagement Team
Ian Howse will be the partner with overall responsibility for the services we provide to you. Katherine Rankin
will be the Senior Manager responsible. David Fletcher will perform the Fact Finding Investigation.
Together they comprise the “Engagement Team”.
c)
Proposed Investigation Strategy
We propose to undertake the following steps to proceed with this investigation If, during the course of
completing these steps, additional or alternative steps are identified as being necessary, we will agree these
with you in writing. We have met with representatives of the College and identified the following steps as being
for this Fact Finding investigation:
• We will meet with the source of the allegations being investigated, to obtain better understanding of their
concerns detailed in their email to the College Principal.
• We will, discuss previous related reviews of the Usk College Equine Centre administration performed by
the Pontypool and Usk Corporate Finance Team, in order to identify related concerns and understand the
operation of the Stables.
• We will obtain from Finance copies of all Usk Equine Centre invoices relating to facility hire covering a
period of one year in relation to the Llangibby Hunt Pony Club, and seek to reconcile this against records
of room bookings at the Stables, and evidence of Llangibby Hunt Pony Club events identified from their
website.
• We will obtain from Finance copies of all Usk Equine Centre invoices relating to livery services and seek
to reconcile these records with records collected from the Equine Centre detailing the horses receiving
livery Services from the College.
• We will review emails you have informed us have been obtained by your IT department from the Subject
of the investigation for evidence of knowingly failing to bill for livery services.
• Dependent on the outcome of the above enquiries, we will support your HR department in interviewing
the Subject of the investigation, in order to obtain their account for findings arising from the above steps.
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Appendix C – Statement of Responsibility
We take responsibility for this report which is prepared on the basis of the limitations set out below.
The matters raised in this report are only those which came to our attention from examination of the
documents made available to us and the information provided to us by Coleg Gwent. We have not
independently audited, or otherwise tested or verified, any of the information with which we have been
presented. The sole purpose of this report is to assist Coleg Gwent in deciding what further action it may wish
to take in this matter. This report should not be referred to, quoted or relied on for any other purpose. The
report should not be relied upon as the basis for any future legal action and should not be treated as evidence.
This report should not be disclosed to any third party without prior written permission. In the event that we
give our permission we cannot accept liability and do not owe nor accept any duty of care to any third parties.
The exclusion of liability and limitation upon our owing or accepting any duty of care also covers any third
party recipients of information which quotes, refers to, or publishes, our report under the Freedom of
Information Act 2000. We ask that Coleg Gwent consult with us promptly should it receive any request for
information under the Act which it considers requires disclosure of the contents of this report, whether in whole
or in part. Our findings might change in the light of further work being performed or further information
becoming available. Recommendations for improvements in control relate only to those matters during the
course of our work and should not be taken to guarantee Coleg Gwent against any future occurrence of fraud
or error.
Deloitte LLP
Cardiff
February 2015
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