MPs blame British Council for huge fraud

OFFICIALS at the British Council, which promotes British culture overseas, have been severely reprimanded for one of the biggest public sector frauds to come before a Commons committee.

The Public Accounts Committee said yesterday it was 'gravely concerned' that the council lost over pounds 500,000 in just 13 days in December 1992. The money would have been used to develop educational programmes in the former Soviet Union, the Czech Republic, Hungary, South Africa and Malaysia. MPs blamed the council for failing to put proper controls in place.

Between 16 and 29 December 1992, seven fake invoices were presented to the council. It paid pounds 520,072 in foreign currency into the overseas bank accounts of bogus suppliers. By the time the fraud was discovered, the money had gone.

The committee was 'astonished' that the council's banking section 'did not regard itself as responsible for checking the validity of payment vouchers, supporting documentation and authorising signatures before paying suppliers'.

The fraud was uncovered in January 1993. Four people from outside the council have been arrested and three have been charged. But only pounds 19,751 has been recovered.