Wales’ public financial watchdog will pay out more than £750,000 in redundancy and pension costs to a former top executive, according to information obtained by Plaid Cymru AM Leanne Wood.
And the Wales Audit Office has admitted that the payments to the then Chief Operating Officer Anthony Snow – although deemed lawful – were personally authorised by the former Auditor General, Jeremy Colman, without telling any of his senior managers.
The payment came to light as the WAO revealed that it was considering improving its own audit procedures.
Auditor General for Wales Gillian Body told Leanne Wood the payments made and due to Anthony Snow were as follows:
“Under the severance arrangements agreed with Mr Snow, we expect the maximum cost to the WAO to be £750,838. This figure comprises the following:
- A lump sum of £107,508 consisting of £100,000 compensation for forgoing Audit Commission redundancy benefits plus a portion in lieu of notice and payment for holiday not taken.
- Additional payments of £21,269 at the time of his departure, which related to payment in lieu of notice of £21,169 and confidentiality consideration of £100.
- Payment of £3,335 (including VAT) to Mr Snow’s legal advisers as part of the agreement.
- Annual contributions of £63,769 to Mr Snow’s pension until he reaches the age of 60. These payments are made by the WAO to DWP, not to Mr Snow directly. We expect the total payments to be made by the WAO to DWP in respect of Anthony Snow until he reaches 60 (retirement age) to be £618,654.
“Given the large size of this severance, as part of our review of these severance arrangements, we have taken advice on whether the arrangements were lawful. Relevant to that advice is the fact that the sums paid were lower than Mr Snow’s maximum entitlements under redundancy terms that transferred with him from the Audit Commission.
“I understand that the justification for Mr Snow’s severance included the fact that while the WAO would incur payments of some £753,000 over the 10 years until Mr Snow’s retirement, the salary and related payments forgone over the same period would amount to some £2m, giving a net saving to the WAO of some £1.2m.
“These payments were personally authorised by the Auditor General at the time, Jeremy Colman. The existence and size of the payments were not disclosed by Mr Colman to the then management committee, or subsequently, to the current executive committee which was established in December 2009, or to the audit and risk management committee.”
She said that the cost of Mr Snow’s severance stemmed from terms inherited from the Audit Commission on the WAO in 2005. Those terms in tune arose from the expansion of the Audit Commission by the UK Government in 1990.
Gillian Body said that the WAO’s accounts were audited by its external auditors, KTS Owens Thomas, and they provided an unqualified opinion. “Since then, however, information that was not available to me, the executive committee or the WAO audit and risk management committee has come to light, and we are considering how we might improve our financial reporting.”
Leanne Wood, the Plaid Cymru AM for South Wales Central, said: “I am staggered that the former Auditor General authorised a deal worth more than £750,000 without the knowledge of his top management team or the external audit and risk management committee.
“We are talking about public money and it again highlights the need to tackle the issue of remuneration among top earners in the public sector. The payments may have been lawful but it doesn’t make them right.
“I will be seeking a meeting with the new Auditor General Huw Vaughan Thomas, who takes up his post on October 1, to seek assurances that proper governance arrangements are put in place at the WAO to ensure nothing like this happens again.
“We must have a system where the National Assembly can scrutinise the workings of the WAO as they scrutinise the activities and spending of other public bodies.”
Anthony Snow, left the employment of the WAO on September 30, 2009 and less than two months later was appointed Chief Operating Officer at the Financial Reporting Council. He had worked for the WAO or its predecessor organisation since October 1990.
