Fury at £2.5m cash blunder

Taxpayers will be left £2.5 million out of pocket, an investigation into a council accounting disaster revealed today.

Senior high-earning Walsall Council officers could now face disciplinary action. The results of an investigation into the way European funding was commissioned and managed in Walsall up to 10 years ago has been revealed.

The authority dished out more than £3million to more than a dozen community groups during 2003-2008 expecting to recoup the cash from the European Regional Development Fund.

But it cannot claim back large chunks of the money from the European Union after it failed to keep a proper audit trail of how cash was being spent.

Council chiefs had expected the amount they were to lose out on to be around £700,000.ImpactBut the full extent of the crisis has emerged today after the publication of an independent investigation by financial advisors Grant Thornton LLP carried out on behalf of the council.

The firm estimates the total impact on the taxpayer to be £2.5million – but the real amount could be higher.

Walsall Council leader councillor Mike Bird was not in charge during the spending of the European funds – he only took over last year.

But he said the knock-on-effects could not be ignored.

"None of the elected members come in for criticism in the Grant Thornton report, it is down to the senior officers and there may well be disciplinary action, that is being looked at at the moment. You can't turn your back on losing £2.5million.

"We are reliant upon officers and I was being told last year it would not be any more than £700,000 and that it was getting bettter and better, whereas every day it was getting worse and worse and £700,000 became £1million and £1million became £2million."