A parish clerk helped himself to £98,000 of the funds of a small village council in County Durham, putting services at risk after his five-year tenure in the part-time role.

Stephen Round made 91 fraudulent payments from Kelloe Parish Council to himself, in the process failing to meet bills for services and, “of significant concern”, left it without insurance cover.

Durham Crown Court heard that the extent of his criminal activity emerged following his resignation and the appointment of his successor, Stephen White, in July 2022.

Dr Chris Wood, prosecuting, said the role was part-time for which the incumbent received quarterly remuneration, to an annual total of £2,468.

The Northern Echo: Parish council services for the people of Kelloe were put at risk by the fraudulent activities of

The court was told the parish was funded by an annual precept of £16,000 from Durham County Council and efforts were made to keep expenditure to a minimum, so the council could purchase land to extend the village cemetery.

Round was said to have gained access to the parish’s bank account and set up an online banking system without the knowledge or approval of councillors.

Read more: Jailed Tanya Tucker facing disqualification as councillor

He also arranged for correspondence to be transferred to his home.

Dr Wood said as part of the checks and balances, he and the council’s former chairman were co-signatories relating to expenditure, which the council was supposed to approve.

But when the expenditure was closely examined it was discovered there was an excess of up to £98,000, with no money left in reserve.

Extensive discrepancies became apparent with only £19,000 worth of transactions under Round said to have been lawful.

Read more court stories from The Northern Echo by clicking here

The first fraudulent transaction under his tenure as clerk was said to have been in February 2019 and it emerged he made payments to himself, fraudulently co-signing “on behalf” of the ex-chairman, pocketing the money for himself.

Payments to HM Revenue and Customs were not made after 2021 and he failed to supply the necessary information.

Dr Wood said there was no external auditing after 2020, allowing his activities to flourish.

There was a build-up of unpaid invoices, for payment for things like burial plots and the replacement of grave stones, while there was a threat of the water supply to allotments being switched off as bills were not met from Northumbrian Water, and the cost of outdoor gym equipment went unpaid.

Round also left the council with no insurance cover in place as he failed to respond to correspondence.

Dr Wood said the fraudulent, unauthorised transactions were made between August 2021 and February 2022, and the defendant tried to cover for some by inventing expenditure for things like "flowering planters".

The Northern Echo: Parish council services for the people of Kelloe were put at risk by the fraudulent activities of

However, the parish flower display for 2022 did not take place due to lack of payment.

When the extent of the financial problems surfaced the council had to take out a £15,000 loan, making arrangements to repay over five instalments.

It emerged there had been 91 unauthorised transactions for £79,387 under Round’s stewardship, with £71,547 going directly to the defendant, while he also paid himself salary which was £3,052 more than he was entitled.

When initially interviewed by police Round made no comment and failed to account for the transactions.

Mr White provided an impact statement on behalf of the parish in which he said since he took over as clerk he has had to work in “unchartered territory” trying to ensure the council did not incur further penalties.

He said for months he worked double the time he was supposed to, to try to alleviate the council’s finances.

Mr White said his predecessor carried out the role of parish clerk on top of his job with the county council so no-one was suspicious of his activities.

He said Kelloe is a semi-rural former mining community and there had been limited awareness of Round’s criminality, but thanks to the county council, the parish’s basic functions have been maintained.

The court heard that 34-year-old Round, of Rookhope Close, Bishop Auckland, admitted a charge of fraud, but on the basis, it was more than £13,000 less than the prosecution’s estimated total figure of £98,000.

Judge James Adkin said it made no difference to where the case sits within sentencing guideline categories.

Fiona Lamb, for Round, told the court that at the time he was struggling financially while going through a marital break-up, and turning to the use of cocaine and alcohol, “which he no longer touches”.

She said he hoped to gamble his way out of his problems to enable him to repay the money taken but got himself into a worse position.

Miss Lamb said at the time he was not staying at the family home and was using hotels, “when he could afford them.”

She said the defendant suffered badly with mental health issues, which are still blighting him, and he did not know what was wrong with him.

Miss Lamb said it may be that he was suffering with ADHD (attention-deficit hyperactivity disorder) for which he has sought help.

She added that if the defendant received an immediate prison sentence it would have, “a massive impact on his family”, as he still maintains an “amicable relationship” with his estranged wife.

Judge Adkin said the defendant abused his position of trust with what he described as, “a persistent fraud”, which he said on the prosecution basis amounted to £98,000.

He said the defendant went to some lengths to achieve it, using fraudulent signatures, changing the banking accounting system and having the council’s correspondence diverted to his address while creating a situation where there was no scrutiny.

The judge said it was undertaken, “partly to fund lifestyle changes”.

But he said that in mitigation, the defendant is of previous good character, other than one unrelated matter a decade ago, with several character references submitted to the court speaking highly of him.

The judge said, having read the probation background report, it appeared the defendant suffered from anxiety and depression, while an immediate prison sentence would have a detrimental effect on his family.

Judge Adkin said for those reasons, and the fact Round presents no risk to the public, he was just able to draw back from an immediate prison sentence.

Read next:

County Durham man guilty of 'classic' controlling behaviour

Man admits breaking into care home in Kelloe, near Durham, and entering residents' rooms

Meet the Irish doctor who became the NHS's first GP in Kelloe

Get the latest news, sports, and entertainment delivered straight to your device with a subscription to The Northern Echo, by clicking here 

He passed a two-year prison sentence, suspended for two years, during which Round must perform 200 hours’ unpaid work, observe a six-month 7pm to 7am home curfew, and take part in 30-days of rehabilitation activity work with the Probation Service.

Judge Adkin added: “If you stay out of trouble and do the work, you and I won’t meet again."

But he warned him if he re-offends, in any way, or fails to observe the community elements of the sentence: “I won’t give you a second chance. It will just be prison.”