A DAMNING audit report into The Pyramids Centre in Southsea has left the swimming pool’s future hanging by a thread.
The confidential document lists a host of concerns and concludes Southsea Community Leisure Limited may be wasting public funds.
Officers found ‘systematic failures in management and financial controls’ which had left the operator ‘exposed to a critical degree of financial failure, fraud and reputational damage’.
Among the problems identified were proper stock records not being kept, staff not being CRB checked and a lack of safeguards to prevent fraud.
Tomorrow, Portsmouth City Council will meet to consider whether SCLL should be given more money, on top of the £1.3m it has already been loaned, to continue running the facility.
But the authority’s own head of finance has told councillors it would be ‘neither legal nor financially responsible’ to keep propping up the firm without insisting on major changes and going out to tender.
Other options include closing the Pyramids while a new operator is sought, taking the running back under council control, or closing the facility for good and demolishing the building.
Former Tory councillor Jim Fleming has been a critic of SCLL since it took over running the centre in 2009.
He said: ‘I’ve been warning about this for months if not years and all of my fears have been borne out. The council has a duty to safeguard taxpayers’ money and they have singly failed to do that.
‘Talks with other local operators need to start now.’
Chairwoman of The Pyramids board Judith Smyth, defended her group’s performance and said there had recently been a dramatic increase in the number of members. She said: ‘We have restructured the management team and are working hard to improve our internal processes and systems so that we can realise our ambition of being a leading social enterprise for Portsmouth.
‘We understand the council needs to consider the future of The Pyramids. It owns the building and has lent us funds to improve it, and we welcome the opportunity to tender for the business in 2013.’
Some other fears raised in the report:
· Low vending machine profit levels suggested either stock or money had gone missing.
· There was no separation of duties between staff selling and stock taking, increasing ‘the risk of fraud’.
· The general manager was unaware of the firm’s ‘legal liabilities’ with regards to CRB checks.
· Too many family members and friends were being employed, leading to ‘the risk of collusion and unfair practices’.
· A VAT invoice was altered against HMRC regulations.
· Two spare safe keys were being stored inside the safe.