A payment of just under £40,000 that was not recorded properly has been given to Wales' former top civil servant, says Audit Wales.
The Welsh Government's former permanent secretary Shan Morgan was paid £39,123 before she left her role last year, however, the spending watchdog said evidence around the payment was missing. Adrian Crompton, Auditor General for Wales said: "I have been unable to obtain sufficient, appropriate audit evidence about the former Permanent Secretary’s working arrangements from April 2018 and consequently whether the former Permanent Secretary was entitled to receive a payment of £39,123."
Mr Crompton was unable to confirm:
The basis upon which the payment was made
- How the payment was calculated
- Whether the Welsh Government had an obligation to make the payment, and
- Whether it is or should be, included in the Welsh Government’s financial statements 2020-21.
Therefore, he said he was "unable to determine whether the expenditure in the financial statements is materially correct". It was one of the reasons why Mr Crompton would not sign off the Welsh Government accounts without qualifying his opinion by referring to it. Other problems included that there was "a material omission of expenditure relating to clinicians’ pension tax liabilities" and spending on some business grants had been included in the wrong year's accounts.
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The Welsh Government's accounts show Dame Shan received a base salary in 2020-21 in the band of £135,000 to £140,000 a year. The accounts say that on stepping down, she was paid "£92,018 relating to salary to the date of departure, pay in lieu of notice, annual leave untaken and an extra-contractual payment amounting to £39,123 (of which £30,289 was accrued at 31 March 2021 as part of the general Employee Benefits accrual) in relation to partial retirement days for which Shan worked, without pay.
The accounts state that she was paid the money because she had partly retired on April 1, 2018, and her working hours and salary had been reduced as a result. But "the exceptional demands of the Covid pandemic required her to work full time and weekends with no opportunity to accommodate partial retirement days".
It said: "Expected practice in these circumstances would be for individuals to recover the days worked through additional leave taken once the exceptional pressures have passed. In the case of the Permanent Secretary her agreed departure date was brought forward which did not allow for compensating days off to be taken."
Dame Shan has since been replaced by former NHS Wales boss Andrew Goodall as the top civil servant in Wales.
Peter Fox, Conservative MS for Monmouth and Shadow Finance Minister said: "It is troubling to see tens of thousands of pounds of public money get paid out for a former top civil servant but not one person or one piece of evidence is able to explain why.
"For the Welsh Government’s records to be qualified like this is highly irregular and poor record-keeping to this extent demonstrates a serious problem. Mark Drakeford’s government needs to explain itself urgently about how this came to happen as simply saying they can’t explain it isn’t good enough."
A Welsh Government spokesperson said: "The Welsh Government firmly believes that the former Permanent Secretary did not receive anything that she was not entitled to and was treated no differently by Welsh Government to any other civil servant."
However, it "acknowledges the concerns about us not keeping contemporaneous records and the reasons for making the payment to the former Permanent Secretary." They also confirmed steps have been taken to improve the process for the future.
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