AN ongoing investigation into Ledbury Town Council's finances has revealed that £100,000 was taken from the listed building reserves to pay legal bills last year – but there was no formal record of the cash transfer.

The council's new town clerk, Angela Price, has suggested that staff shortages may have led to "an oversight",

But only a town council minute existed to "agree that the funds would be used", and despite the huge sums involved, there was no formal record to show the reserves had been drained and when – although £100,000 was transferred from the listed building reserves, leaving just £14,000 behind.

A formal record of the cash transfer, called a 'virement', should have been made during the last financial year, but apparently none existed for the auditor to inspect.

Mrs Price said: "There was a minute to agree that the funds would be used, it’s just that the virement was not undertaken – maybe a better way of putting it would have been to say no 'formal record', as it had been agreed that this would take place.

"I believe the error was as a result of there being little or no staff at the time with a lot of changes to the administration and that it was an oversight which had been recognised but not acted on immediately, but that has now been rectified. This oversight has now been rectified to the satisfaction of the council’s internal auditor."

But there also seemed to be a problem with the time-scale of the payment.

Mrs Price said that while the reserves "were not drained illegally", they were apparently not drained at the correct time.

She said: "The virement to transfer the funds from the listed building reserve to the Judicial Review budget line had not been made during the relevant years.

"Therefore, we took advice from our internal auditor on what the council should and could do in respect of this. The advice given was that whilst it had been agreed that the Listed Building Reserve was to be used to off-set the cost of the Judicial Review but that there was no record of the virement having been made, the council should formally record, via a decision and subsequent resolved minute, the virement from the Listed Building Reserve to the Judicial Review budget line."

This record was made just two months ago, in July 2019, despite the cash transfer actually being made during the last financial year.

The town council is to commission a special audit investigation "to prevent or, at the very least, reduce the likely risk of governance failures recurring".

The intention is for the investigation to be conducted during the 2019-20 financial year, "hopefully before the end of this calendar year".

The town council found itself paying out legal costs after losing a Judicial Review which was brought by the current chairman of the finance of general purposes committee, Cllr Liz Harvey.

Cllr Harvey was not committee chairman at the time, and nor was she the chairman during the last financial year.

A town council statement last November revealed the extent of the sums involved.

It said: "The total bill in these proceedings so far amounts to £219,925. This is made up of £121,664 of legal fees incurred by the Council and £96,261.66 legal costs incurred by Cllr Harvey which the Judge ruled must be paid by the council."

The High Council set no specific sum for payments of costs to Cllr Liz Harvey, who won the Judicial Review, except for an interim payment of £30,000.

This interim payment, however, did not rule out other payments, "subject to agreement between the two parties".