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Museum of Wales Accounts 1998-99

Sir John Bourn, head of the National Audit Office, today reported to Parliament that in October 1998 the National Museum of Wales made an irregular payment to Mr Tim Arnold, their departing Assistant Director (Resource Management). Sir John nevertheless issued an unqualified opinion on the Museum’s 1998-99 Accounts, as he did not consider the payment to be material in the context of the overall accounts.

Mr Arnold’s departure from the Museum after 14 years’ service followed allegations of mismanagement, although these did not relate to any suggestion of impropriety or fraud. The Museum, acting on legal advice, sought to reach a negotiated departure settlement with Mr Arnold rather than conduct a potentially protracted investigation of the allegations. Under this settlement, the Museum agreed to:

  • pay Mr Arnold £30,000 as compensation for loss of office;
  • pay his legal costs in respect of the settlement up to a maximum of £1,450 plus VAT; and
  • provide an employer’s reference for Mr Arnold using an agreed form of words which is silent on the reason for his departure.

In return, Mr Arnold undertook to:

  • accept the payment as full and final settlement of any claims he might have for breach of contract, unfair dismissal, etc; and
  • not to disclose the terms of the Agreement to any third party.

National Audit Office staff established that written approval for these payments had not been obtained by the then Director of the Museum, as required under the terms of the Museum’s Financial Memorandum.

The current Director of the Museum had not been made aware of the details of the payments on taking up her position in November 1998. When in July 1999 the National Audit Office brought the payments to her attention, she acted correctly in applying to the National Assembly for Wales for retrospective approval. This was refused by the Principal Finance Officer of the National Assembly in October 1999 on several grounds, including that:

  • the Museum might have avoided this expenditure if they had tackled the problem under normal disciplinary arrangements;
  • he could not have accepted any settlement which included a confidentiality clause; and
  • the principle of making special payments in order to save further costs is not generally accepted in the public sector.

"Public bodies should not use taxpayers' money to avoid dealing with alleged poor performance. I fully understand why the National Assembly was unable to grant retrospective approval for this payment. They, and the current Museum Director, acted correctly in their handling of this case after my staff brought it to their attention."

Sir John

Notes for Editors

The National Museum of Wales was established by Royal Charter in 1907. It is a registered charity, trading as the National Museums & Galleries of Wales. It was a Non-Departmental Public Body sponsored by the Welsh Office until 1 July 1999, when this sponsorship responsibility passed to the National Assembly for Wales. The arrangements for this sponsorship are set out in a Management Statement, incorporating a detailed Financial Memorandum, which were issued by the Welsh Office and since adopted by the National Assembly for Wales.

The 1998-99 accounts of the Museum are the last to be presented to Parliament by the Comptroller and Auditor General. Under the Government of Wales Act, the responsibility for audit of the Museum's accounts from the 1999-2000 financial year passes to the Auditor General for Wales, who will present both the accounts and any reports he makes on them to the National Assembly for Wales.

The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office employing some 750 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.


PN: 66/99