Accountancy firm Grant Thornton was unable to give its final opinion on the authority’s books last month, because of a question mark over a complex loan deal.
The council’s external auditors have now given the green light to the way the loan was recorded - but one member said damage to the authority’s reputation had already been done.
“There has been a wave of negative publicity that [suggested] we couldn’t get our accounts signed off, because of the opinion you took last month,” County Cllr Charles Edwards told a Grant Thornton representative at a meeting of the council’s own Audit, Risk and Governance Committee.
“I don’t know whether it was acceptable for you to have made this judgement [then] and now come back a month later - and it’s magically all fine again.
“I think the [council’s] finance team do a sterling job and this has put a burden on their shoulders that they didn’t need.
“I’d like to see Grant Thornton held to account for that,” County Cllr Edwards, a Conservative committee member, added.
The query related to the way in which the liability of the loan - known as a Lender Option Borrower Option (LOBO) - had been assessed. Other authorities with similar arrangements have had their accounts signed off by different auditors.
Responding to the criticism, Mike Thomas, a Director at Grant Thornton, said: “[We] have led the discussion with other [accountancy] firms to get a resolution of this matter.
“Unfortunately, that didn’t happen in time for the end of July. Other firms took their own views and decided to sign off.
“The bottom line is that...until we were comfortable, we weren’t going to give our opinion.
“And we could easily have just done that and moved forward - but the firm needed to know it was giving the right opinion,” Mr. Thomas told the cross-party committee.
“It is important our auditors maintain their independence. I think the [regulatory body] would want to give an opportunity to auditors to make sure that they can do all their due diligence - and they wouldn’t want to curtail [that],” Ms. Ridgwell told the committee.
Committee chair Alan Schofield also wanted to know whether the council would now feature in a ‘name and shame’ list of local authorities which had missed the deadline for signing off their accounts.
Mike Thomas said he had been assured that Lancashire would not be identified “in a negative way” as a result of what he described as a “valid” delay.
Labour committee member Miles Parkinson said he understood the reasons for Grant Thornton’s caution.
“We see all too [frequently] cases where auditors and businesses have not done [what they needed to] and have been found severely lacking. That’s a position we don’t want the council to be in,” County Cllr Parkinson added.