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UNREALISTIC PRICES CAUSED SUNDERLAND DSO LOSSES

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The district auditor's investigation into£6.5 million losses at Sunderland City Council concludes they were caused...
The district auditor's investigation into£6.5 million losses at Sunderland City Council concludes they were caused by unrealistic prices, not fraud or corruption.

Much of the blame falls on the DSO business manager, who relied on historical costs for tenders. In his public interest report, district auditor David Parkin says he found no evidence that jobs were deliberately underpriced but that managers 'did not recognise the significance of the changes in its operating environment'.

The report criticises city treasurer David Feeney for failing to monitor the situation. Mr Parkin says Mr Feeney should have sought greater justification for the optimistic view given of the DSO's financial position. 'In short, the city treasurer should have discharged his special s151 responsibilities more rigorously,' the report says.

Since the deficits were revealed, the DSO has been restructured and its senior management team has been replaced. Mr Feeney has remained in post although he takes early retirement at the end of this year.

A spokesman for the council said: 'I can guarantee there is no connection between his retirement and this report.'
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