Auditors finally deliver report on council finances

Reading Borough Council’s accounts were finally signed off at the Audit and Governance Committee on 17 November, after missing the deadline of 30 September.

The Audit Commission had changed the council’s auditors from KPMG to Ernst & Young for this audit, and the new auditors failed to deliver their report on time saying that the council had not provided them with the information they needed. They added that council staff had worked hard to rectify the situation since September and they recognised that some of the delay had been due to capacity issues experienced by key council staff.

The auditors now say that all areas of the audit have been completed and they can give an unqualified opinion that the council’s financial statements give a true and fair view of the council’s financial position, as well as income and expenditure, at 31 March 2016. They also said that accounts had been prepared according to the code of practice on local authority accounting.

The chair of the council committee, councillor David Stevens, said he was “absolutely delighted we now have an unqualified audit report,” adding that one should never underestimate the effect of switching auditors.

“It has been a difficult transition from the old auditors to Ernst & Young,” said councillor Liz Terry. “We’d had years of reassurance, but it’s been quite a shock to everybody.”

In addition to the approval of the council’s accounts which forms the main business of the audit, the auditors are required to consider value for money and noted that:

… we are not satisfied that … Reading Borough Council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2016.

The auditors cited unreliability in financial reporting and controls, and the untimely completion of reconciliations which increased the risk of fraud, such as that committed by Peter Owusu-Ansah who was jailed for two years in August after council staff discovered he had stolen over £42,000.

The auditors also said:

We found that planned action had not been taken to achieve sustainable savings during 2016 that may have prevented the need for significant savings to be made as a matter of urgency in the 2016/17 budget.

Ernst & Young plan to charge the council additional fees to cover the extra time and effort it took them to complete the work.


  1. Reading Borough Council audit report
  2. All papers for 17 November 2016 Audit and Governance Committee
  3. Audit and Governance Committee
  4. Audit and Governance Committee 28 January 2016, appointment of Ernst and Young.