A council has failed to get its official accounts cleared by its auditors in time for today’s (July 31) deadline.
Milton Keynes Council has had to post a message on its website to explain why, following failures in its own internal processes. Finance chiefs believe the council has suffered ‘reputational’ damage.
The statement on MK Council’s website explains that there had been a three-week delay in “getting the full draft financial statements ready for audit by the deadline of May 31.”
The council’s external auditor, EY, has suffered from a lack of staff, and they have not yet been able to confirm a date for the audit to begin. A meeting of the council’s Audit Committee last night (Tuesday) was told that EY were due to meet next week to decide on a date.
The Audit Committee was told in a report from head of finance Anna Rulton, and director of finance and resources Steve Richardson, that the finance team had “faced a number of different challenges.”
These included the introduction of a new finance system, another piece of software, and when “the key officer who specialises in this area went on maternity leave in February”.
Cllr Dan Gilbert (Cons, Loughton & Shenley) was told that if the council had got its house in order, the audit could have been completed by on time.
He said: “The third point raised is startling because one person went on maternity leave and it seemed to have a knock-on effect. That’s a real worry. One person is right to go on maternity leave but it contributes to this whole issue.” He wondered whether the finance team needs some more staff.
The council says it was planned for with a specialist agency coming in to replace the officer but “the lack of local knowledge on how the accounts had previously been constructed combined with the new systems meant that this took more time than was anticipated.”
Mr Richardson said there were “no real additional costs” from the delay but that it could affect applications to the government for important grants. He admitted that there would be an impact on the council’s reputation from the delay.
He hopes that the fully audited accounts would be presented to the Audit Committee in September and then signed off. But councillors heard there is a risk that they might not be.
Mr Richardson added that he was “more confident about next year” because the council was taking resources back in house from the Local Government Shared Service (LGSS). The LGSS is where MK Council shares some resources with Northamptonshire and Cambridgeshire county councils.
“There have been single points of failure,” said Mr Richardson. “We will have more resources for next year’s accounts.”
Steve Bladen, from external auditor EY, said the company had not been able to keep up with the “number of resignations”, which had delayed audits to a number of councils and public bodies around the country. He said EY would be meeting next week to look at the way forward.