Fraudsters near £105k bill on Creative Scotland card

The fraudsters' spending went as far as the Caribbean. Picture: PA
The fraudsters' spending went as far as the Caribbean. Picture: PA
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FRAUDSTERS spent nearly £105,000 on a credit card belonging to arts quango Creative Scotland before anyone noticed the money was missing.

Criminals bought luxury holidays and flights around the globe on the account, but staff said they were too busy to check monthly statements.

The fraud only came to light when the card hit its spending limit, after eight months and 132 transactions. The amount was just under the £137,404 that has been spent legitimately on credit cards since Creative Scotland’s formation in 2010.

It was only four months after an auditor’s analysis of the fraud that it was reported to police, with £70,400 eventually reimbursed from credit card provider JP Morgan. Creative Scotland, which has budget of around £83 million a year, acknowledged “weaknesses” in its system at the time and said a further review was taking place.

According to reports, the £104,600 in spending took place between December 2010 and July 2011. Auditor Deloitte was called in after the fraud was discovered and found a “serious control lapse”.

Eight credit cards belonging to the organisation were found to regularly be passed around staff, and some workers kept photocopies of them to make purchases easier. However, Deloitte said criminals obtained details when staff faxed copies of both sides of the cards to hotels when booking rooms.

The finance department did not check the credit card statements every month, blaming “increased workload” and a broken link to a website with online statements.

A spokesman for Creative Scotland said: “This fraud occurred when Creative Scotland was first formed and in the process of bringing together two sets of finance systems from the Scottish Arts Council and Scottish Screen.

“We fully acknowledge weaknesses in our system at that time which led to the fraud going undetected. Robust systems are now in place to prevent such a fraud happening again. We have regular auditing and continue to improve the quality of our financial monitoring. Our new chief executive, Janet Archer, has actioned a further review of our internal expenses policy, which is under way.”

Some of the legitimate credit card expenses included £716 to stay in a five-star hotel in Rio de Janeiro, stays in Glasgow’s Blythswood Square and Edinburgh’s Glasshouse, and thousands of pounds on music downloads, concert tickets, flowers and drinks orders.

Creative Scotland said senior staff sometimes needed to be part of international delegations, host receptions, dinners and meetings. Spending was closely monitored, said the quango.

In June, The Scotsman revealed that Creative Scotland was spending up to £45,000 to ask people what they thought of the body and its work, and was bringing in consultants to “better understand our customers”.

The arts body had decided to go back to the drawing board over the coming year, with Ms Archer taking over last month and being responsible for a new blueprint. In the past year, the quango faced a rebellion by artists, the resignation of its chief executive, and damning reviews.

Creative Scotland also spent thousands of pounds on a roadshow of “open sessions” around the country to seek the views of artists and arts organisations.

Scottish Conservative deputy leader Jackson Carlaw MSP said: “This organisation has often been criticised for being wasteful with money. Now it seems it’s even allowing other people to be wasteful on its behalf.”