BRENTWOOD: Audit Commission's damning verdict on council accounts

By revans

A DAMNING report has revealed serious mismanagement and incompetency in the council's accountancy procedures.

The situation is so bad the Audit Commission will not sign off the authority's accounts for 2008/09.

What's more it says the council did not have adequate arrangements in place to secure value for money for residents, and did not provide evidence to support millions of pounds worth of transactions.

As a result, the commission has issued what's called a "qualified disclaimer opinion". It means the council's accounts, being in too great a mess to sort out, will not be audited for the last financial year. Instead the council will be allowed to focus its efforts on the future.

Inadequate

In an Annual Governance Report, auditors gave the council a Level 1 for their use of resources – the lowest possible of four grades, meaning the council does not meet minimum requirements – and gave them an Inadequate rating in regards to securing value for money.

Shocked councillors from all parties, who heard the commission's report for the first time at an Audit Committee meeting on Thursday night, described the situation as "damning", a "viper's nest" and "a barrel of worms".

However, Brentwood Borough Council leader Cllr Louise McKinlay said they were doing everything they could to improve the way they work – including undertaking a overhaul of accountancy procedures.

"We have hit the base and the only way is up from here," she said.

Councillors approved the authority's Statement of Accounts in August – six weeks late – and since then auditors have attempted to sift through them.

However, district auditor Paul King has now decided they are in such a mess that it would not be worth the money, time or efforts of council officers and auditors to try and continue to make them agree.

Though there is no suggestion of money "missing" from the council, miscalculations meant there was often great disparity between the authority's Statement of Accounts and their actual Purchase Ledger.

Assets

For instance, while the council claimed they had more than £405 million worth of council dwellings, auditors could only find evidence of assets worth £372 million. And because the council did not provide a complete and accurate bank reconciliation, it could not evidence a total net worth on the balance sheet of £419.680 million or £49.7m worth of journal entries.

Mr King told councillors: "The standard of the financial statements and the supporting working papers has been poor to the extent that we have not been able to properly audit the financial statements and carry out and complete our work."

The errors, councillors heard, have been underlying the council's accounts for a number of years and the mess, Mr King confirmed, could take two years to rectify.

The officers responsible for accounts have largely left the council during recent Organisational Development review.

The Gazette asked the Audit Commission how many other councils in the country had received a qualified disclaimer opinion however, a spokeswoman said they were not in the business of "ranking" councils.