Auditor questions Pembrokeshire council chief payment changes
The Wales Audit Office has refused to sign off Pembrokeshire council's accounts after questioning payments to its chief executive, it has emerged.
Senior councillors backed changes for highest-paid council staff to leave the Local Government Pension Scheme (LGPS).
They would then receive a cash equivalent of the employer's pension contribution, for tax reasons.
Pembrokeshire council said the change was aimed to "aid the recruitment and retention of senior staff".
The local authority said the changes involve no additional costs.
The Wales Audit Office (WAO) has refused to sign off Pembrokeshire council's accounts for 2012-13 because of what is termed a "difference of opinion" over the legality of the change.
The WAO later added: "Other than Carmarthenshire and Pembrokeshire county councils, the appointed auditor is not aware of any other unitary authorities in Wales who have entered into a similar arrangement."
The issue will be discussed by Pembrokeshire's corporate governance committee on Monday.
Carmarthenshire council has taken a similar decision, judged to be unlawful by the Wales Audit Office.
But Pembrokeshire council says it has had contrary legal advice that the decision by the senior staff committee on September 2011 was lawful.
Carmarthenshire council also said it was advised that its payments to chief executive Mark James were lawful.
Carmarthenshire's audit committee will discuss the issue on Friday.
BBC Wales has learnt that the chief executive of Pembrokeshire council, Bryn Parry Jones, was present at the meeting when the changes were discussed by members and he was also present when the issue of changes to pension contribution was discussed.
Although the meeting was open to the public, it was held in the chief executive's office.
The public were excluded for the part of the meeting when the pension contributions were discussed.
Six councillors attended the meeting: John Davies (council leader at the time); Jamie Adams (deputy leader at the time, now leader); John Allen Mirehouse; David Wildman (retired); Susan Perkins (Lab at the time, now independent) and Stan Hudson.
Pembrokeshire council's annual financial report for the last year shows that the chief executive received a total of £194,661 including pension and equivalent contributions.
There were no employer pension contributions to the LGPS on his behalf for 2012/13 against £30,600 for 2011/12.
It is not known whether other senior council staff opted out of the scheme.
A spokesperson for Pembrokeshire council has confirmed that the chief executive did opt to take a payment in lieu of contributions to the pension scheme.
The spokesperson said: "As stated in the written report submitted by Wales Audit Office, this is a complicated area and will affect other public bodies in Wales.
"The council's legal advice is that the decision made by the senior staff committee on September 28th 2011 - to allow senior staff to receive the equivalent of the employer's pension contribution if they opt out of the Local Government Pension Scheme - is lawful.
"The scheme is open to all senior officers and there is no additional cost falling on the council from any officers 'opting out' of the Local Government Pension Scheme.
"The purpose of offering the 'opt-out' is to aid the recruitment and retention of senior staff.
"The chief executive, Bryn Parry Jones, was present at the senior staff committee meeting on 28th September 2011 as he would be for all senior staff committee meetings."