02 Feb 2025
Have the Liberal Democrats lost control over the council’s finances?
A scathing report to SADC’s audit committee has highlighted “significant weaknesses in arrangements to make informed decisions using timely and accurate financial information”.
Roopal Bakarania, audit manager for the external auditor BDO, said they had also found a “significant number of material discrepancies and inconsistencies”.
She said SADC should review the capacity and technical expertise in its finance department, adding: “We consider the council’s inability to produce materially accurate statement of accounts to reflect insufficient capacity and resources in the finance department and there is a significant weaknesses in arrangements to make informed decisions using timely and accurate financial information and to support statutory financial reporting requirements.” The committee also heard that not only has the council failed to meet the Government’s deadline to publish audited reports by December 13 2024, there appears little or no likelihood of it doing so in the near future.
Officers from the finance department admitted to council “errors” and later stated that the efforts in trying to sort out the problem had resulted in a “horrendous few years”.
Despite the concerns raised, the committee signed off the statements of accounts for the three previous financial years.
But although the BDO auditor’s assessment of SADC’s financial capability paints a grim picture the administration has refused to accept they have had issues in the past which have still not been resolved.
Councillors blamed the auditors for the delay, and the committee’s independent chair Jonathan Flowers highlighted national issues instead of addressing the specific issues found at SADC.
Council leader Cllr Paul de Kort said: “This brings to an end what has been a frustrating period for us and dozens of other local authorities across the country.
“We have complied with all laws and regulations governing our financial activities and there is nothing untoward in the accounts, which have been open to public inspection.
“Unfortunately, the delays in auditing the accounts – which were out of our control – have led to some unfair criticism and speculation that can now be put to rest.
“We will move forward, look to the future and concentrate on finalising our accounts for the last financial year, 2023/24, with the way clear for them to be audited in a timely fashion.
“A disclaimed opinion is what BDO have made for our accounts for the financial years, 2021/22 and 2022/23. For the financial year 2020/21, they have issued a modified opinion. The audit commenced for that financial year but was not completed.
“Some issues were identified during the audit but were not resolved within the time constraints. These are of a technical nature, such as the method used to value land and buildings, and we don’t necessarily accept the points BDO have raised. It is a matter of judgement, and we will simply agree to disagree.
“The important thing is that we can now put these frustrating delays behind us and with the committee having approved the accounts, we can move on to complete our accounts for 2023/24 with the help of our new auditors, KPMG.”
Jonathan Flowers, the independent chair of the council’s audit and governance committee (pictured above), said: “As the council’s external auditor BDO’s report explains, delays to the auditing of local authority accounts have been a national problem due to factors which councils have been powerless to prevent. These range from significant staff shortages among BDO and other auditors, who have had difficulty in recruiting and retaining staff, to the adverse impact upon their work of the Covid-19 pandemic.
“The Government recognised councils were experiencing lengthy delays through no fault of their own and introduced legislation last year which allowed them to clear the backlog and start afresh.
“Auditors are now required to issue a disclaimed opinion on accounts which the backlog pressures mean they have been unable to check.
“More than 300 disclaimed opinions have been made by auditors for local authority accounts across the country.
“It offers no opinion rather than an approval or a non-approval and attaches no blame. It is a mechanism the Government is using to reset the local audit assurance process and allow for a fresh start.
“This means that the audit and governance committee have had to look to other sources of assurance in relation to our accounts such as the work of our internal audit service.
“We look forward to putting the backlog behind us, though it will be some time before any of the affected councils can get fully approved accounts because of the overhang from this issue.”
Labour Councillor Mike Hobday, who is a member of the audit committee said: “This is profoundly embarrassing for the council. We now have four years of accounts which have not been signed off by the auditors. We have had to report to Government that three years’ sets of accounts were approved late. Because the council doesn’t have a confirmed financial balance, we now expect that the next two years’ accounts will get a critical audit report.
“If St Albans district council is merged into a larger unitary council, it may be that 2019/20 will have been our last set of audited accounts.
“This is not entirely the council’s fault – there is good reason to be critical of the council’s auditors. But residents don’t care about fault. They just want assurance that the council is spending council taxpayers’ money wisely. As of today, the council cannot offer this assurance.”
