Politics: FO rebuked over frauds in Jordan

SIR JOHN KERR, head of the Diplomatic Service, received a stinging rebuke from the Commons Public Accounts Committee last night.

In a report on a scandalous breakdown of financial controls at the British embassy in Amman, Jordan, in which the British taxpayer was fleeced of more than pounds 109,000 by a local accountant, it was revealed that the Foreign Office official who doled out the cash was paid a pounds 31,600 bonus when he was compulsorily retired last September.

The cross-party committee condemned that outcome as "indefensible", and demanded immediate and tough action to change the cosy culture of a Diplomatic Service that appeared "to regard financial management as a second-order activity".

The committee also reacted with shocked outrage to a question put to them by Sir John, in a hearing last February, when he had sought their advice "as to whether the restitution of sums improperly gained might be pursued in exchange for less punitive criminal charges".

Last night's report said: "We are surprised that the department should consider there is an issue here. These are not matter for compromise or for deals.

"Those who defraud the public purse should be subject to the full rigour of criminal justice and should not be encouraged to think that this might be ameliorated if they were to repay the money obtained improperly. Departments should pursue both criminal charges and the restitution of their losses."

The pounds 109,000 fraud followed another Amman embassy scam in which another local accountant misappropriated pounds 333,000 in fraudulent claims for dead pensioners.

Sir John told the committee that it was " a shaming occurrence" for the Foreign Office that two such frauds should take place, one after the other, in two adjoining rooms in the Amman embassy.

But he said that while the Foreign Office had considered sacking the Senior Management Officer who had been duped in the most recent fraud, compulsory retirement had been deemed the best course.

Similarly, the diplomats who had been responsible for that unnamed official's slackness - including the ambassador - had all retired by the time that fraud had come to light last year.

If the Senior Management Officer had retired, normally, at the age of 60, in 2001, the MPs were told, he would have received a lump sum worth only pounds 43,300 - pounds 31,600 less than the amount he was awarded last year. He also receives a pension of pounds 14,436.50 a year.

David Davis, the former Conservative Minister who chairs the committee, said last night: "It is frankly incredible that financial controls should have failed twice in the same embassy... The taxpayer should not lose out again.

"Staff responsible for checking local spending must do the job properly and should know that negligence in these important matters will be subject to very rigorous disciplinary action."