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Camden News - by SIMON WROE
Published: 16 July 2009
Charity cronyism claims to be kept secret

Quango blocks publication of report probing millions of pounds mismanaged by Novas

A MESSY war of words erupted last night (Wednesday) as a troubled charity investigated for financial mismanagement attacked the auditors probing its affairs.
Tempers became frayed after allegations of cronyism among senior staff at Novas Scarman – the charity which ran out of money for its ambitious overhaul of the landmark Arlington House homeless hostel in Camden Town and had to give up on the scheme.
The accusations were revealed after a draft report compiled by investigators was leaked to the press. It has since been decided that a final report would not be made public.
Novas accepted the findings of the nine-month inquiry held by the Tenant Services Authority (TSA)– part of what was once the Housing Corporation – that there had been “serious failures” in the running of the charity.
But it also came out fighting by issuing a statement criticising the independent auditors who worked on the case, BDO Stoy Hayward, for “arrogantly ignoring many of the true facts” while “highlighting personal relationships which were irrelevant to the financial issues facing NSG (Novas Scarman Group”.
The charity’s statement added: “We consider much of their report, produced at substantial cost to the public purse, to be unprofessional in the extreme.”
The TSA has decided not to publish the BDO report because it contained apparently “prejudicial” or “harmful” comments about individuals.
But an executive summary of the final report leaked last week showed questions had been raised about former Novas chief executive Michael Wake’s professional relationship with three women executives at the charity.
The draft report states that Mr Wake’s “relationship” with one of the women “may have had an unfair influence on the decision to promote her and casts doubt on whether there was a sound business case for her to go on business trips to Malaysia with Michael”.
A TSA spokeswoman refused to confirm or deny the allegations.
BDO Stoy Hayward said: “We are surprised by the TSA’s findings and are disappointed in its decision not to publish our full detailed report in its entirety although we are aware the executive summary has been leaked.”
A statement released by TSA summarising the Board’s findings ruled that Novas had not had the funds to complete renovation works on Arlington House, leading to its “nil-cost” transfer to One Housing Group in June.
The TSA also said the charity had faced “serious cash flow problems” in December 2008 but that changes in management and financial strategies meant public investment and the interests of Arlington House residents were now secure.
It added: “The TSA Board has decided not to publish BDO’s report on the NSG (Novas Scarman Group) at this time for a number of reasons, including that the Board only relied on some facts supplied by the report, and that some comments in relation to individuals appear to be prejudicial.”
A Novas spokeswoman said: “We thank the TSA for their impartiality and their comments about the BDO report. We take this opportunity to publicly criticise the BDO Stoy Hayward report for levelling wild, unsubstantiated and, in some instances, ridiculous allegations against our people and organisation.”
In response, BDO Stoy Hayward said: “We have completed a thorough and detailed investigation in accordance with our letter of engagement signed by the TSA and our work has been conducted to the highest standard and has conformed with all existing guidance. During the investigation, we had regular client contact. We absolutely stand by the conclusions reached in this report.”

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AS a former senior employee of the NOVAS Group I can confirm that the BDO report is entirely accurate and has uncovered many of the failings and dynamics of this corrupt organisation. The only problem with the BDO report is that it was not published or carried out earlier as it may have saved a lot of public cash and preserved services to the vulnerable. How people named in the report are in a position to pass judgement on it is simply more of the same 'eyes wide shut' behaviour of Novas executives.
S. Wilkinson


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