London land purchase scheme has £160m blackhole 14/09/2009 |
|
| |
| |
The London agency responsible for acquiring the land on which the 2012 Olympics will be held ran up a 160 million pound shortfall as a result of poor accounting and financial controls, a report said on Friday.
The London Development Agency (LDA), the Mayor of London's business and economic agency, created the overrun after failing to do enough to monitor spending and expenditure commitments on land purchases and compensation to companies forced off the 500-acre site in Stratford, east London.
The 159.8 million pound figure, which includes remediation costs and professional fees, is much larger than initial LDA forecasts of 86 million pounds, accountants KPMG said.
The report also found the Olympic Legacy Directorate (OLD), which is part of the LDA and in charge of the scheme, should have known of the overrun from at least as early as April 2008, but it was another year before it was reported to senior officers during an agency-wide audit.
The report criticised the OLD for poor documentation and audit trails as well as inaccurate spreadsheets.
"The financial controls within the OLD were generally inadequate," it added. "The basic requirements for managing and accounting for a budget were not met."
KPMG found that OLD management had the power to authorise payments of up to 7 million pounds without approval from finance directors, while the finance manager, who monitored and reported on the land acquisition budget, nor the budget-holder, were qualified accountants.
"This has contributed to the lack of effective accounting procedures and lack of rigorous reporting internally of financial and management information," the report added.
It did not suggest evidence of fraud. Disciplinary action is being taken against staff and the LDA is looking to balance its budgets by reviewing operations, a spokesman said.
The LDA's job of managing the Olympic legacy are being transferred to the separate Olympic Park Legacy Company.
London Assembly Conservative Olympic spokesman Andrew Boff said 45 million pounds will have to be taken from projects this year to fill the gap "which would mean cuts for skills programmes, funding for affordable housing and job brokerage schemes."
"Olympic-gate is a woeful example of financial negligence at best, and at worst a botched cover-up," he said in a statement.
Conservative Boris Johnson was elected mayor in May 2008, ousting Labour's Ken Livingstone.
More than 200 companies were forced off the industrial site in Stratford when London was awarded the Olympics in 2005, about half of which are still seeking compensation.
There were 3,000 separate land interests in total, to be paid out of a LDA Olympic legacy budget of 1.1 billion pounds.
(Source: Reuters)
|
| Back |
| |
| |
|
|
 |
Advertisement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
