22 Dec 2024
Four years of district council accounts remain unaudited and unapproved due to shortcomings within the national auditing process for local authorities.
Councillors sitting on the SADC audit and governance committee were told on Thursday that the auditor’s report for the three financial years 2020-21, 2021-22 and 2022-23 had arrived late on the Tuesday, less than 48 hours before the meeting.
They also heard that SADC will miss the deadline for the approval of the 2023-24 accounts at the end of February.
Officers recommended that the meeting defer consideration of approval of the initial three sets of accounts until their meeting on January 22, even though this means they missed the Government’s backstop date of December 13.
What does this mean for council taxpayers? Although much of the problem is outside SADC’s control, it suggests there is a lack of transparency surrounding these accounts as they stand.
Labour councillor Mike Hobday, who sits on the audit committee, said: “This is profoundly embarrassing for the council. We now have four years of accounts which have not been signed off. This is not entirely the council’s fault. 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.”
Conservative group leader Cllr Teresa Heritage added: “We are shocked and horrified that yet again the audit committee was not able to approve the last three years’ accounts. I do not know how we can be certain about any figures provided to council and required to ensure that the council has sufficient funds to operate and produce a valid budget for ‘25/26. Residents expect better.”
In response to enquiries from the St Albans Times, SADC assistant director for finance Linda Parker said while they had been hopeful of approving the audited accounts last week, they faced a similar situation to other councils with delays to the process.
She explained: “The key issue affecting us is the shortage of local authority auditing capacity nationwide which the Government is trying to help alleviate.”
The reports received from auditors BDO on Tuesday night had been found to contain material inaccuracies, so the committee could not sign them off and approval had to be deferred.
While there is no penalty for missing the December 13 backstop deadline set by the Government to focus the minds of auditing companies, clearly this is not where the council wants to be. The delay has affected a great number of local authorities and is plainly not a satisfactory situation.
“All our Statements of Accounts up to and including 2019/20 have been audited and published, leaving the 2020/21, 2021/22, and 2022/23 BDO-audited accounts outstanding.
“We are now working to complete additional work before Christmas for BDO to consider in the New Year ahead of the audit and governance committee meeting on January 22.
In 2022 BDO decided to leave the local authority auditing market once the audits for 2022-23 had been completed, meaning SADC is working with their replacements, KPMG, on the accounts for 2023-24.
“With many other local authorities all trying to get their accounts audited by the end of February to meet the Government’s February backstop deadline for 2023/24 accounts, the competition for auditing capacity is such that we expect there to be a short delay to those as well. We anticipate these being available for consideration by the audit and governance committee at their meeting on March 5, all being well.
“The Statutory Annual Accounts, though important, are far from the only source of transparency for residents. The budget-setting process is very open, and the strategy and resources committee receives a public notice every quarter of performance against the budget.
“The audit and governance committee also receives reassurance against fraud or financial irregularity from the work of the internal audit team.”
She added that there is a public inspection period each year when residents may inspect, ask questions about and challenge items in the council’s accounts.
“The council understands that people may find the delays puzzling, but hopefully by explaining the underlying reasons clearly, and the impact the lack of auditing capacity is having across the country, they will see that the council is doing its best to get its accounts audited, which is what we all want.”
