Cambridgeshire councils to miss deadline to publish audited end of year accounts

Cambridgeshire County Council, Cambridge City Council and South Cambridgeshire, Huntingdonshire, East Cambridgeshire and Fenland district councils all said they will miss the deadline of July 31.

Senior figures from each council said the issue is partially linked to using the auditor Ernst and Young, which is the private contractor procured for the councils by the Local Government Association’s Public Sector Audit Appointments Ltd.

Ernst and Young denies that in every case the delay is linked to its service.

In a statement it said: “In some instances an audit has been delayed due to the late preparation of draft financial accounts by a local authority. Unforeseen circumstances have also created resource challenges for a small number of our UK public sector audits.

“In these cases, to deliver a high-quality audit, EY has proposed a revised timetable to ensure that we are able to provide a team with the relevant sector knowledge.”

The Cambridgeshire and Peterborough Combined Authority, also externally audited by Ernst and Young, has also said it will miss the deadline.

To comply with government regulation, each authority must have its accounts externally audited and publish the results before the statutory deadline on July 31, or issue a notice explaining why it has failed to do so.

Peterborough City Council is the only local government authority in the county to say it would not miss the deadline.

The precise reasons for missing the deadline vary with each authority.

Chair of the county council’s audit committee, Mike Shellens, said Ernst and Young “contributed” to its missed deadline.

“It’s not all their fault, it’s not all our fault,” he said.

Explaining the wider situation, he said: “The Government has unilaterally reduced the time available to complete local authority audits. The new deadline coincides with everybody else’s audits so they have added to the peak workload for audits.”

Suresh Patel, a representative for Ernst and Young, apologised to Huntingdonshire District Council’s corporate governance committee on Thursday (July 25), conceding the authority prepared its draft annual financial report in time and the fault was with his own company.

He said: “I want to apologise to the committee for putting you in this position and the inconvenience it is causing.

“I also want to apologise to the finance team because I am acutely aware of all the hard work and efforts that goes into preparing your accounts – especially by May 31 which you did do diligently.”

He added: “Personally it’s the first time in 25 years I have had to tell a client I cannot do the work that we have been contracted to do.”

Dan Cooke of Ernst & Young reportedly told the combined authority last week: “Unfortunately, a number of our clients’ audits have not been completed on time.

“As a result we have a backlog, and this includes the external audit for CPCA Final Statement of Accounts for 2018/19.”

Cllr Mark Goldsack told a meeting of the combined authority that Ernst and Young had provided a “poor excuse”.

Chair of the audit committee at Peterborough City Council, Cllr David Over, said it also use Ernst and Young, however, the council will be publishing the externally audited accounts prior to the statutory deadline on July 31.

He said he believed it is “because we are quite a small authority we can get things done in a more flexible and efficient way”.

Chair of the Fenland corporate governance committee, John Clark, said: “I am satisfied that Fenland was all ready for the audit to come in and do our books. We had made all the preparations.”

A letter from Ernst and Young to East Cambridgeshire District Council said: “Unfortunately, because of staff turnover, challenges in recruiting new staff and now unexpected issues arising at other local authority audits which commenced in June, we have had to review the timetable for your 2018/19 audit and currently plan to commence the audit after July 31.”

It will be the second year in a row South Cambridgeshire will miss the deadline, with its 2017/18 external audit still outstanding.

South Cambridgeshire District Council’s lead cabinet member for finance, Cllr John Williams, said: “We take our financial management responsibilities extremely seriously and are confident that the audit of our 2017/18 accounts will be completed very soon. This relates to the accounting period up to the end of March last year.

“Delays by Ernst and Young auditing the accounts has had an impact and we expect they will make comments on how we can improve as part of their review. We’ve already taken steps to ensure we complete this important process quicker in future by revising our processes and recruiting a new experienced head of finance. We’ll continue working hard to complete our processes relating to last year’s books as quickly as possible.”

A full statement from Ernst and Young said: “Audit quality is the priority for EY and underpins our business decisions. In some instances, an audit has been delayed due to the late preparation of draft financial accounts by a local authority.

“Unforeseen circumstances have also created resource challenges for a small number of our UK public sector audits. In these cases, to deliver a high-quality audit EY has proposed a revised timetable to ensure that we are able to provide a team with the relevant sector knowledge.

“EY continues to consult with the chief finance officers at the impacted local authorities and the Public Sector Audit Appointments Ltd (PSAA).”

Ben Hatton, Local Democracy Reporting Service