Four charged in £2.1m fraud probe at Midlothian Council

Midlothian House, the main office for Midlothian Council, Buccleuch Street, Dalkeith
Midlothian House, the main office for Midlothian Council, Buccleuch Street, Dalkeith
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FOUR people have been charged by police following an investigation into an alleged £2.1 million fraud at Midlothian Council.

Police have confirmed two men aged 63 and 49 and two women aged 61 and 50 have been reported to the procurator fiscal.

An internal investigation was launched by the council earlier this year after serious allegations were made by members of staff about suspected irregularities relating to roads contract management.

The investigation, which was concluded in May, found that £2.1m worth of work had been awarded to a contractor not on the council’s approved list.

The alleged payments were made as part of road services works over a period of seven years.

The findings from the council’s internal audit and corporate fraud team were sent to Police Scotland.

The council said at the time that a senior manager had resigned in the wake of the investigation into the payments.

A Police Scotland spokeswoman said: “Following a referral from Midlothian council and an investigation by the Economic Crime Unit, two men aged 63 and 49, and two women aged 61 and 50 have been charged.

“A report has been sent to the procurator fiscal.”

The report by council officials in May following the internal probe said a robust investigation had been carried out.

“It was discovered that payments had been made to a contractor not on the procurement framework and this amounted to £2.1m over a period of seven years. No allegations were made relating to work not being carried out or subject to inflated invoices.”

It said the internal audit and corporate fraud team had identified weaknesses in relation to internal processes and procedures.

And it recommended a series of 14 measures to address these, including a review of contract management procedures and controls to ensure there were adequate segregation of duties, and oversight/checking of compliance with the contract by senior management. It also said the roles and responsibilities of senior managers should be reviewed to ensure an adequate understanding, awareness and accountability for day-to-day activities in their areas of responsibility.

And it recommended regular training for all staff to promote an understanding and awareness of the implications of the Bribery Act 2010, the potential for corruption in the workplace and the council’s policy on client-contractor relationships.

Other measures recommended in the report included a review of the process for approving and setting up new suppliers on the payments database; regularly reviewing payments to suppliers; introducing due diligence checks on conflicts of interest declarations; and promoting the council’s whistleblowing policy.

A Midlothian Council spokesman said: “We are aware from the police that, following an investigation by the Economic Crime Unit, two men aged 63 and 49, and two women aged 61 and 50 have been charged.

“While we cannot comment any further, we can confirm that none of the four charged are current Midlothian Council employees.”