Tax fraud chief 'paid wife £100k'

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David Partridge, chief operating officer of the Revenue and Customs Prosecutions Office, was sacked for gross misconduct after awarding his wife a "lucrative" consultancy contract.

A report into the department by the House of Commons Public Accounts Committee (PAC) found that shortcomings in the "internal control system" led to the situation.

The director of the Revenue and Customs Prosecutions Office, David Green, was "thrown into the deep end" when appointed from outside the public sector, the group of MPs said. Mr Green lacked the necessary support, training and experience to identify or mitigate any risks that occurred, they added.

The Revenue and Customs Prosecutions Office was set up in April 2005 to prosecute fraud and tax evasion offences for the former HM Customs and Excise and Inland Revenue (now HM Revenue and Customs) and from April 2006, for the Serious Organised Crime Agency.

PAC chairman Edward Leigh said: "The new director of the Revenue and Customs Prosecutions Office was thrown in at the deep end when appointed from outside the public sector."

Mr Green did a good job at concentrating on how the organisation was performing but this was at the expense of establishing robust financial procedures and controls, he said.

Mr Leigh said: "A weak control system contributed towards the chief operating officer of the organisation being able, first, to award his wife a lucrative consultancy contract and, secondly, to become company secretary of her newly established limited company.

"HM Treasury needs to remind departments of the overriding importance of demonstrating propriety in procurement. It must also drive home the message that, where transactions involve conflict of interests, HM Treasury written approval is needed in advance for those transactions."

The PAC said that all weaknesses in the department's internal control system - identified by the National Audit Office in 2006 - had now been rectified.