On 20 and 21 October and 1 and 7 November 2016 a Disciplinary Committee of the Chartered Institute of Public Finance and Accountancy (CIPFA) heard allegations against Mr Faysal Maruf.
The facts related to two matters which took place while Mr Maruf was the group accountant within the Adult and Community Services department (ACS) of the London Borough of Barking and Dagenham (the council).
In late April 2014, Mr Maruf, without reviewing the working papers prepared for his consideration, deleted or reduced various electronic journal entries totalling £632,525 relating to payment in advance (PIA) accruals for the financial year 2014/15. When asked who had authorised the changes he said that a decision had to be made to increase the outturn to bring it into line with February’s monitoring report without saying that it was his decision. He gave an ambiguous response when asked who had made that decision. Mr Maruf subsequently sought to justify his actions to finance managers by referring to the calculation basis used for the value of PIA direct payments for the financial year 2012/13 closedown when this was not a proper justification for his actions.
Mr Maruf’s actions resulted in material transactions being excluded from the council’s ACS accounts at the 2013/14 closedown. He carried out these actions without regard to proper accounting practice procedures and with the deliberate intention of bringing the actual outturn into line with the projected Period 11 outturn without proper justification. His actions were misleading and potentially damaging to the financial and/or reputational position of the council in that the adjusted figures did not present a true and accurate statement of account. The committee found that Mr Maruf failed to act in accordance with the Institute’s Standard of Professional Practice on Ethics.
In the second matter, during the financial year 2013/14 closedown Mr Maruf authorised a journal prepared for his approval which moved ongoing revenue costs for Centre G (which was closed) to a capital holding code relating to Centre H. This resulted in the inappropriate capitalisation of £487,500.44 of the ongoing revenue costs into the build costs of Centre H.
Mr Maruf’s actions were contrary to advice that had been provided to him in October 2013, by a colleague and by the corporate finance team, that capital receipts could not be used to pay for revenue costs for Centre G. His actions were also found by the committee to have been a breach of CIPFA’s Code of Practice on Local Authority Accounting and to have contravened CIPFA’s Code of Conduct’s fundamental principles of professional competence and due care and professional behaviour.
Mr Maruf admitted being in breach of Bye-law 23 (b), (c) and (d). The committee found that by acting in breach of the CIPFA Code of Ethics Mr Maruf had breached Bye-law 23(b). Mr Maruf was also found by the committee to have breached both Bye-law 23(c), in that he had conducted himself in such a way so as prejudicially to affect the status, reputation or welfare of the institute, and Bye-law 23(d) in that he had acted in a manner which had brought, or was likely to bring, discredit upon himself, the council, the institute or the profession of accountancy.
The committee considered that Mr Maruf’s actions with regard to the PIA matter had the potential to result in the publication of inaccurate and unsupportable end-of-year figures. It was only through the diligence of his team members that his crude adjustment of the figures was identified.
In respect of the capitalisation issue the committee viewed Mr Maruf’s actions as negligent. Although there had been no financial repercussions from his actions there was breach of accounting principles and a reputational impact in that the Council’s accounts were not accurate. It had a direct reputational impact on Mr Maruf and his employer and in turn could have an adverse reputational impact on the profession and the institute.
The Disciplinary Committee determined to impose a reprimand.
In reaching this decision the committee took into account that Mr Maruf had twice acted below the standards expected of a professional accountant in unrelated areas of practice and that public confidence in the council could have been undermined by his actions. He had acted carelessly in relation to the capitalisation matter and had placed too much reliance on others.
The committee also took into account Mr Maruf’s previous good record and his character references, that the adjustment issue was easily corrected and his early acknowledgement of his mistakes and poor performance in the PIA matter. He had fully engaged and co-operated with the council and the Institute and shown genuine remorse and regret and not sought to blame others.
The committee imposed a costs order against Mr Maruf.
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