A well known Liverpool building company failed to record details of payments from Liverpool Football Club for the use of 137 car park spaces.
However, there is no suggestion that any money was missing. Earlier this month the council published a number of audit reports into the Beautiful Ideas Company (BICo.)
BICO, set up as a community interest company, was launched in 2014 to manage matchday car parks in north Liverpool used by Liverpool and Everton fans.
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The money raised from car parks on Priory and Walton Breck Road was to be used to help communities across north Liverpool. The audit report from 2015 reveals that the Flanagan Group, operators of the car parks, received £226,890.70 from the company.
The report also reveals how the Flanagans failed to record BACS payments from Liverpool FC for the use of 137 spaces.
The report reads: "In addition, it was noted that income received via BACS from Liverpool Football Club for the guaranteed use of 137 spaces within the car park could not be found on the financial system print outs provided."
There was no suggestion in the report that LFC had done anything wrong. The same report states that the income from LFC was included in 'reported totals.'
The report states: "These amounts have been included in the reported totals however, from which we can take confidence that the income is included within the funds held by the Flanagan Group.
"A recommendation has been made to ensure that all income related to car parking activities is recorded in the same codes to aid the recommended reconciliation processes."
The audit report also stated that there was a lack of clarity around the licence agreement handed to the Flanagans by Liverpool Council.
It reads: "It was noted that the management fee charged for the operation of the car park has varied (both less and more) from the expected 15% as stated in the licence granted by LCC to the Flanagan Group to operate the car park. It is recommended that formal agreements are approved by the CIC (what is CIC?) that set out the appropriate fees to be charged.
"The management fee for the first two seasons has been charged on a net basis (post deductions for wages/materials) etc. The original licence sets the management fee at Liverpool City Council – Anfield Car Park - 9 -15%. There is no formal agreement to raise the management fee to the 20% charged which has been levied against the takings from the 2014/15 season.
"A review of the licence awarded to the Flanagan Group found that the wording does not make it clear whether the management fund should be taken from gross income (pre-deduction of costs) or net income (post deduction of costs)."
Steve Radford, leader of Liverpool's Liberal Party, was critical of the audit report. He said: "The council summary report is a masterpiece in truth evasion. Once again investigative journalism has served the council better than the officers we should have depended upon to provide an account."
Following the publication of the reports the council issued a statement which read: "The Beautiful Ideas CIC ( community interest company) is a separate entity to Liverpool City Council and we have never had any legal powers to intervene in its operation.
“Our Internal Audit Team worked alongside the organisation to look solely at the controls and compliance relating to the income and use of funds from car parks on land leased from Liverpool City Council.
"We found there were acceptable controls and compliance procedures in place, but a number of recommendations were made. In our final report produced in 2019 we found that the only outstanding issue was related to record keeping relating to the collection of match day income, but as the car parks are no longer operating it is no longer required.
“The findings and recommendations of these Internal Audit reports are indicative of general issues regarding how areas of the council were operating at the time, as highlighted by the Best Value Inspection in March 2021. Since this time the council has implemented an organisation-wide Strategic Improvement Plan and is taking significant steps to deliver the necessary improvements to strengthen governance and control arrangements.
“The matters raised in the reports are those that came to Internal Audit’s attention during the course of their work. While every care has been taken to make sure the information is as accurate as possible, Internal Audit can only base their findings on the information and documentation provided to them, and the sample evidence tested, at that time.
"In line with standard audit practice, Internal Audit undertakes sample testing and aims to provide reasonable assurance about risk management, governance and control processes. Its findings are not intended as a comprehensive statement of all the weaknesses that existed, or of all the improvements that may be needed. These reports were produced solely for the internal use and benefit of Liverpool City Council.”
The internal audit reports from 2015 and 2019 looked into the operation of match day car parks and the collection of charges. The ECHO approached the Flanagan Group for comment.
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