Ex-auditor Jeremy Colman's £750k pay-off 'secret'
A disgraced former auditor general deliberately kept secret a £750,000 pay-off to a senior employee, says the Wales Audit Office (WAO).
A WAO internal review found Dr Jeremy Colman instructed a colleague that nothing should be put in writing about payments to Anthony Snow.
Colman is serving a prison sentence for possessing indecent images.
The assembly's Public Accounts Committee chair said the news was "of significant concern" to him.
The investigation into the compensation and pension payments to Mr Snow, the WAO's former chief operating officer, began after Colman's departure from his post in February when it emerged they had not been accounted for.
The review found that Colman instructed the WAO's head of finance that the payments should be kept secret from everyone else in the organisation.
The pay-off emerged in July this year in response to a freedom of information request.
BBC Wales understands the WAO's head of finance has been suspended while an investigation into his role takes place.
Colman was jailed for eight months in November after possessing more than 170 indecent images of children.
Mr Snow was given a payment of over £107,000 when he left his position as chief operating officer at the audit office in September last year, and will be given pension contributions totalling more than £600,000 until he turns 60.
The WAO's own auditors, KTS Owens Thomas, are also under scrutiny, as they advised that the liabilities for these payments did not have to be included in the office's accounts, and continue to maintain that this is the case.
They are to appear before the Public Accounts Committee in the New Year to explain their role.
The WAO now faces significant financial difficulties as a result of the pay off to Mr Snow, and other undeclared liabilities amounting to more than £1m.
Darren Millar AM, chair of the assembly's Public Accounts Committee, said: "The National Audit Office's serious findings in relation to the preparation of the Auditor General's accounts from 2005 to 2010, are of significant concern to me and my Public Accounts Committee colleagues.
"It will make uncomfortable reading for some existing and former members of the Wales Audit Office staff and it raises further concerns about the organisation's external auditors.
"The new Auditor General, Huw Vaughan Thomas, has reassured the Committee that he is determined to get to grips with these failings and to put systems in place to restore confidence in the work of the Wales Audit Office.
"We will work with him to achieve that end."
A separate investigation by the UK National Audit Office has found no evidence to back up anonymous allegations that the WAO had billed audited bodies for work not completed.
In a letter to the chair of the Public Accounts Committee, the new Auditor General Huw Vaughan Thomas said the events of the last year have taken a heavy toll on staff at the WAO.
"Staff morale has undoubtedly been affected by the events of this year, and by the often adverse media coverage that this has generated," said the letter.
"The discovery of the failures of integrity at the very top of the organisation and of the weakness in the governance and management arrangements of the Wales Audit Office has been a blow to the morale of hard working and highly committed staff, and has left a legacy of anxiety in the organisation.
"Perhaps even more damaging has been the impact of a sustained campaign by certain individuals to expose the organisation to unevidenced, anonymous allegations.
"I have made it abundantly clear to all staff that if they have concerns then there are proper routes for them to raise them, and that I am always willing to listen, and if necessary, take appropriate action."