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Cumbria CC has confirmed that a thorough investigation into the magnitude, causes and implications of a significant...
Cumbria CC has confirmed that a thorough investigation into the magnitude, causes and implications of a significant overspend in the Cumbria Care draft accounts for the year ended 31st March 2002 is underway.

A substantial increase in the predicted deficit has been reported to councillors who have immediately called for urgent action to deal with the problem.

The latest predicted deficit is£1,440,000 an increase of around£900,000 on the original estimate of£560,000 which had already been reported to councillors and accounted for in budget planning for 2002/3.

Cumbria Care's initial view is that payroll costs for the year had been incorrectly forecast by them. Cumbria Care made an urgent request to meet with the deputy director of corporate finance on 6th June. The director of finance and central services and the chief executive were notified on 7 June. The chief executive then initiated the Management Audit Review referred to above.

Mike Ash, deputy leader of the council and chairman of the budget review sub committee says:

'Both myself and the vice-chairman of the budget review sub committee, councillor Jefferson, were advised of this issue on the 10th June by the chief executive who confirmed the matter was being investigated. Following further discussions the issue has been reported to the budget review sub committee and to the Labour group leader. The budget review sub-committee finds the situation unacceptable. There are clearly continuing financial difficulties within Cumbria contract services, in spite of the fact that senior management had assured councillors that the budget was appropriate and was being well managed. It is particularly unacceptable that the current issue had not been identified especially in the light of events of the previous year with the school meal catering budget.

'I have asked the chief executive to prepare an urgent report for cabinet setting out what steps cabinet and council would be required to take and what action the chief executive expected to take. This report will be submitted to the meeting of cabinet on 9 July. The budget review sub committee fully supports this action and reiterates the fact that they had received repeated assurances from officers that steps had been taken to ensure that the situation which has arisen, would not occur again. The group decided that all county councillors be made aware of the situation.

'As the management audit investigation is underway and will be reported and considered fully by the council's cabinet on 9 July it is inappropriate to speculate about the detail of this matter at the present time. Reference will be made to this at cabinet on 25 June.'

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