Stays at luxury hotels and meals at fine-dining restaurants were claimed on expenses by publicly-funded tourism agency Welcome to Yorkshire - with no evidence that such spending was justified, an inquiry has revealed.
A report by accountancy firm BDO into the expense claims made at the tourism body over the past six years ordered in the wake of former chief executive Sir Gary Verity’s resignation on health ground in March said it had uncovered evidence of expense claims outside of policy limits.
The claims were mainly relating to hotels, food and beverages, while there was “an increase in the use of luxurious hotels and fine-dining restaurants during the most recent periods we examined”.
The report said: “Given the increase in WtY’s profile and events, and the seniority and roles of some of WtY’s guests, there may have been an expectation, on the part of those guests, to receive a certain level of hospitality.”
But it added: “These should be a closer review and challenge of expense claims and authorisation going forward.
“Policies should be put in place that recognise that prestigious events and important guests may necessitate a higher spend on hospitality and other expenditure. However, wherever possible, spending should be anticipated and pre-approved by appropriate senior management team members and/or [the] board. This will assist in controlling such spending.”
The report also said that it was not possible from the expenses data to establish the “direct benefit” of the expenditure made for networking events such as taking people out for dinner.
It said: “We are aware from those interviewed that there was some concern surrounding the amounts spent on networking. However, we are also aware that one networking event directly contributed to an attendee making a substantial donation to WtY.
“The issue is that there is no documentary evidence available to determine what an appropriate level of expenditure is, and how the benefits of that spending were accrued nor any evidence to suggest consideration was given to the benefits of the spend. There is no evidence of a limit set on expenses relating to entertaining.”
Investigators also found “an increasing number of missing receipts, specifically for credit card expense claims”, with a “large proportion of credit card transactions in the latter period of our review not being accompanied by receipts”. There were three company credit cards, in operation with a spending limit of £8,000, which were paid each month in full by Welcome to Yorkshire by direct debit.
Welcome to Yorkshire’s interim chairman, Keith Stewart, said one of the cards was held by Sir Gary, with the others being held by another member of the organisation’s senior management team and a financial director.
“There wasn’t sufficient governance of the expenses system. Not every item of expenses was covered by a receipt and also as far as entertainment was concerned, while there was a general expenses policy, unfortunately there wasn’t a specific policy for entertaining. Going forward, any claim for expenses it will be very clear what the benefit was.”
Mr Stewart said he had ensured two of the credit cards were cancelled after taking over as the chairman in April from Ron McMillan. The remaining card is now held by the finance director and can only be used for specific pre-authorised expenses.
Interim chairman Keith Stewart admitted it will take time to restore public trust in Welcome to Yorkshire.
“It won’t happen straight away, these things never do,” he said. “I think we can change the culture and restore trust. But it will take time. Wounds take a while to heal.”
He added: “I would like to apologise to all out stakeholders across Yorkshire for the fact things went wrong with the governance of Welcome to Yorkshire.
“We are absolutely determined to right the wrongs and ensure Welcome to Yorkshire is fit for purpose for the future.”