A failure to consult the Treasury before handing the Government's former Chief Executive a £500,000 'golden handshake' has been described as a "grave oversight" by the States spending watchdog.
The Public Accounts Committee has disagreed with the Chief Minister's explanation of the error as just a "technical breach" of Government spending rules, and his claim that Mr Parker's payment was no more than he was due under his contract.
They have also said that Mr Parker "...failed to respect the contractual obligation that formal approval for his secondary employment could only be obtained in writing from his employer"; and that his appointment was announced before the contract had been signed, leaving the Government in a "weaker bargaining position."
The PAC has found that Mr Parker's contact permitted the former Chief Executive to take a second job, provided that it was approved in writing by the employer. This didn't happen when he accepted a role with property firm New River, with verbal approval from the Chief Minister only being given, without any consultation with the States Employment Board.
Pictured: The Chief Minister, John Le Fondré gave verbal approval for Mr Parker's second job - but his contract required it in writing.
But there was no specific disciplinary procedure for the CEO, which led to a problem in providing a fair appeals process for him:
"The Committee noted that disciplinary action against the Chief Executive would need to be operated by the States Employment Board. However, with two members of the Council of Ministers sitting on the States Employment Board (Senator John Le Fondré [Chief Minister and Chair] and Deputy Susie Pinel [Minister for Treasury and Resources]), and therefore potentially conflicted, it was concerned that the remaining members of the States Employment Board may be unable to operate an effective appeals process."
The comments come in a formal review of the 2020 States Annual Report and Accounts by the Public Accounts Committee (PAC), which they describe as "particularly challenging" because of covid, the exit payment for Mr Parker, and the fact that for the first ever in the history of the States accounts, the Government Auditors gave a "qualified" opinion, specifically because of that payment.
In an explosive report, the PAC also says that:
1) "The contract of the former Chief Executive was not agreed until after his appointment was announced. This left the States Employment Board in a weaker bargaining position to negotiate a final contract with the former Chief Executive."
2) "The line management of the Chief Executive should be reviewed and updated in time for the appointment of the next, permanent Chief Executive."
3) "The line management of, and process for, entering into compromise agreements for the Chief Executive or resolving scenarios regarding any secondary employment or appointments s/he may undertake, is flawed because the disciplinary processes and procedures for States’ employees have not been designed with the unique post of Chief Executive in mind."
4) "The Committee does not accept that the minimal contractual entitlement was ‘to the value of £500,000’as stated by the Chair of the States Employment Board, and concurs with the Comptroller and Auditor General’s finding that the former Chief Executive was paid more than the minimum (and maximum) contractual entitlement, particularly given that the States Employment Board have accepted the factual accuracy of the Comptroller and Auditor General’s Report."
Pictured: the payment to Mr Parker led to the first ever 'qualified' report on the States accounts in history.
And it is the £500,000 payment to Mr Parker to avoid legal action over his departure from the Government which attracts the strongest criticism from the PAC, specifically the fact that Treasury Officials weren't consulted in advance - something the Chief Minister, Senator John Le Fondré described as a "technical breach" of the government's rules.
PAC Chair, Deputy Inna Gardiner, commented: "...the PAC does not share the view of the Chief Minister, in his role as Chair of the States Employment Board, that the lack of consultation with any member of the Treasury and Exchequer before or during the time the exit payment was negotiated with the former Chief Executive was a mere “technical breach” of the Public Finances Manual.
"The PAC is of the view that it was a grave oversight which may have caused, contributed to, or given the impression of, an absence of proper financial oversight and/or expertise in respect of the final negotiated settlement."
While accepting that the payment itself was "not unreasonable" the PAC goes on to call for a specific disciplinary procedure to be put in place for Government's Chief Executive - something that wasn't there for Mr Parker, and is thought to be a key reason for the way events surrounding his departure unfolded.
They have also set out a list of other changes which need to be made before a permanent successor is appointed.
Deputy Gardiner also warned that the Government needs to be much clear in how it defines savings, with some "efficiency savings" having only been achieved by deferring spending from 2020 to 2021:
"Other findings we have made support our recommendations that future Annual Report and Accounts should separate spending made in response to covid-19 or other non-recurrent expenditure from routine annual spend and greater clarity should be provided to distinguish ‘efficiency savings’ from the deferral of growth and other rebalancing and savings measures."
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