Independent probes urged for erring RSLs

Hacas Chapman Hendy managing director Julian Ashby says in a report for the Housing Corporation that such investigations are invariably limited in scope and fail to detect all the details.

"They can lull the association into thinking the problems are only minor and do not merit wider or more formal investigation.

"If further allegations come to light, or subsequent investigation shows more serious problems then the association is on the defensive, with its integrity on the line," he warned.

Ashby recommended that an independent investigation was the most effective method, as it would reassure the corporation that the association had a grip on the problem.

He added the quango should not investigate allegations itself, because it risked being seen as judge and jury.

"There is often an initial tendency to play down the extent of any problem or to present it in the best possible light. This strategy is rarely effective. More often than not it comes across as not understanding the problem, not being willing to tackle it or, worst of all, colluding," Ashby explained.

Ashby assembled 15 case studies of associations where allegations were investigated. They ranged from fraud cases where managers were eventually jailed to claims of excessive entertaining, harassment and racial discrimination.

In one case, wrongdoing was proved three years after the initial allegation. Ashby commented: "The failure to get to grips with the original allegation cost the association dear.

"This was not just a matter of being ripped off for another three years, but the embarrassment of having conducted an inadequate investigation the first time."

The corporation keeps a close watch on such cases, and for some the matter ends with statutory appointments to the board.

Ashby warned that most serious failures demonstrated a wider breakdown in systems. Those that did not understand this were likely to face hard scrutiny from the corporation.