WAVERLEY Borough Council has issued a “concluding statement” after a fraudster was jailed for more than two years last month after duping council officers out of £233,000 taxpayers cash.

Following allegations that Waverley’s Conservative majority sought to “cover-up” the fraud to protect its reputation for financial management, the statement explains why the council was not able to unveil the full details of the fraud prior to a whistleblower making them public some 18 months after the offence.

“In April 2014 when it became victim of the fraud, the incident was subject to an active police investigation and in order not to prejudice the trial, the council was unable to publish any details.

It said: “Such disclosure would have also breached rules around exempt information prescribed by Schedule 12A of the Local Government Act 1973.

“Now Matthew Charles Lowe, a repeat offender, has been convicted and sentenced to two years and three months, Waverley is now in a position to publish a statement about the fraud and the actions the council took.”

It added, in April 2014, Lowe posed as one of the council’s suppliers, Mears, and in total was paid £233,400.92. This included an initial payment of £115,589.57 on April 17, 2014. and a second payment of £117,811.35 on April 24, 2014.

The statement added: “The council was made aware of the fraud on April 24, 2014, and within 24 hours it notified the police, the council’s bank and its external auditors, Grant Thornton.

“The leadership and the chairman of the audit committee were also notified on the April 25, 2014, and were advised the matter was confidential and the main objective was to recover the monies and secure a successful prosecution.

“A full internal investigation was immediately undertaken by the head of finance and internal audit client manager. 

As a result of the investigation the council strengthened its procedures and how they are monitored; the investigation also resulted in appropriate disciplinary action being taken.

“Grant Thornton was satisfied with the measures put in place by Waverley to prevent this from happening again and found the treatment of the issue in the council’s accounts were appropriate and in accordance with the Accountancy Code of Practice.

“Waverley’s internal auditors have continued to check the procedures throughout 2014/15 and have been satisfied that they are being followed.”

According to the statement, the council’s decision-making executive committee were informed and updates were also given at all four of its audit committee meetings in 2014/15 – albeit in the exempt session at the end of the meeting, out of the public glare.

The minutes of the meetings were reported to full council.

“The incident was reported in the audit findings of the external audit report by Grant Thornton in September 2014 which was published on the council’s website,” it added.

But the external audit report mentioned by the council only includes a brief mention of “an external fraud affecting the council in April 2014”, and Waverley has faced criticism for only publicising the full extent of the fraud after a council whistleblower spoke out in October 2015.

Following the whistleblower’s revelation, in November, all councillors were invited to the audit committee where a full officers’ update was provided in exempt and minutes were reported December’s full council.

But that fact, combined with Lowe’s jail sentence, has failed to appease the council’s critics and only last month UKIP – the official opposition at the time of the fraud – called for an independent investigation of the Tories’ conduct, which has so far been in vain.

Waverley is yet to recover £25,000 of the missing taxpayer cash.

Its statement concluded: “To date £138,696.96 has been recovered from Lowe’s bank and £69,703.96 has been paid to Waverley following an insurance claim.

“Waverley continues to pursue the full unrecovered amount. WBC takes fraud extremely seriously and will always prosecute fraudulent activity involving taxpayers’ money.”