Reading Borough Council’s (RBC) audit and governance committee expected to receive accounts and a report from council auditors Ernst & Young (EY) for the year ended 31 March 2017 at their meeting on Thursday 28 September; this will not now happen.
Approving the annual statement of accounts is among the responsibilities of the committee. The accounts and audit report were absent from the papers published last week in advance of the meeting. A four page report from the council’s strategic director of finance has been published giving a high level summary of what has caused the delay and actions that have been and will be taken to rectify the situation.
This report states:
The committee was due to receive both the accounts for 2016/17 and a report on those accounts from the council’s external auditors, EY. It has not been possible to deliver either due to significant challenges in the preparation of the accounts, which has led to me, as the council’s director of finance, at this stage not being able to sign off the accounts as a true and fair view of the council’s finances. This consequently means that EY are unable to issue an audit opinion.
The date by which the accounts and audit report are expected or planned to be available is not mentioned in the report. There is a statement that:
The 2016/17 accounts will, in due course, be revised, signed off and audited, probably alongside the accounts for 2017/18.
Central government has accelerated deadlines for the preparation of all local authorities’ 2017/18 accounts. The deadline for preparation of draft accounts will move from 30 June to 31 May; 30 days earlier. The deadline for publication of final audited accounts will move from 30 September to 31 July; 62 days earlier.
The 2015/16 accounts were also delivered and signed off late on 17 November 2016. Despite publication of draft accounts this year by the deadline of 30 June, a second draft with changes was issued subsequently.
Actions underway and proposed to address the situation include:
- a restructure of the finance department,
- a ‘health check’ of the main finance system,
- recruitment of additional finance staff,
- changes to finance systems, procedures and processes.
Additional staff and extra auditor time inevitably means extra costs and more pressure on council finances.
- Audit & Governance Committee – terms of reference
- Audit & Governance Committee 28 September 2017 – papers and webcast
- Accelerating your financial close arrangements – Ernst & Young
- Auditors finally deliver report on council finances
- A long summer for accountants and auditors