Action plan to help council stop fraud

FINANCE experts have issued Dundee City Council with an action plan to help prevent a repeat of the £1 million fraud carried out by a rogue IT worker.

Mark Conway is serving a five-year jail sentence for siphoning £1,065,085 of local authority money into his own building society account.

Conway, 53, of Brechin, embezzled the money over seven years to cover huge gambling debts.

Following his sentencing in August, the council announced an independent review of procedures — and next week, a report by PricewaterhouseCoopers (PwC) will go before councillors.

The council-commissioned analysis reveals how the conman was able to hoodwink the authority without rousing suspicion — and how he was rumbled.

But PwC has also advised the council to better document its accounting process, after auditors found staff “could not demonstrate how the accounting systems actually worked”. It also recommended restricting system access to relevant staff, and checking the council’s books and those of suppliers to ensure the numbers tally.

However, PwC concluded: “The method used to extract the fraudulent payments was very sophisticated in comparison to other more commonly observed fraud cases.”

The report, to be read by the councillors’ scrutiny committee on Wednesday, said Conway used his access to and knowledge of privileged council IT systems to insert fake invoices into the authority’s outgoings.

Using his expertise, he made the invoices look as though they were being paid to legitimate suppliers. In fact, the money went straight to his own bank account.

The report stated: “Conway was able to intercept payments made against these fraudulent invoices and divert them to bank accounts within his control.

“Payments on genuine invoices submitted by these suppliers would not be intercepted, resulting in suppliers being paid as normal.”

The fraudster remained undetected, PwC said, because of the complexity of the council’s accounting system.

Dundee City Council has now recovered all of the money — save for a £10,000 insurance policy excess — through i nsurance, the forfeit of Conway’s pension and a payment from a third party.

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Mark Conway