A group of influential MPs has criticised the Treasury for a weak internal control system that led to a senior official paying his wife almost £100,000 for HR consultancy work.
David Partridge, former chief operating officer at the Revenue & Customs Prosecutions Office, was sacked for gross misconduct after awarding his wife the contract and then becoming the company secretary for her firm.
Partridge hired his wife Michaela on a six-month deal to put together HR policies at the new organisation when the Inland Revenue merged with Customs in 2005. He completed all the steps of the recruitment process himself and recommended his wife for appointment as the successful candidate, a report by the Public Accounts Committee said.
Despite the conflict of interest, her contract was not cleared in advance, although the Treasury gave its approval afterwards. However, a National Audit Office investigation into the department's accounts in 2006 later described the deal as "novel and contentious".
Committee chairman Edward Leigh said: "A weak control system contributed towards the chief operating officer of the organisation being able, first, to award his wife a lucrative consultancy contract and, secondly, to become company secretary of her newly established limited company.
"HM Treasury needs to remind departments of the overriding importance of demonstrating propriety in procurement. It must also drive home the message that, where transactions involve conflict of interests, HM Treasury written approval is needed in advance for those transactions."