Delay in signing off South Ribble Council's accounts

All local authorities should have their books validated by independent external auditors by 31st July.

But a meeting of the borough’s scrutiny committee heard that “legacy issues” had caused the finance experts to inform the council that there was no prospect of that deadline being met.

Council leader Paul Foster, whose Labour group took control of the authority in May, told committee members that council officers had done all that was expected of them.

“I’m in the unfortunate position of having to announce that the external auditors have advised that they will not be in a position to sign off our 2018/19 accounts by the statutory deadline due to a number of legacy issues identified by both the new administration and the auditors,” Cllr Foster said.

“The officers have provided all of our accounts in time, as required and in the correct format. It is external third party issues that have been raised by our internal audit team and others which have [put] the external auditors in a position where they are not happy to sign off the accounts.

“The auditors can’t give a date when the accounts will be signed off, but I can assure you that the right people are in the right places making sure that the information the auditors are after is provided in a timely manner,” he added.

For the past three years, external auditors have issued South Ribble with a so-called “qualified judgement” in their assessment of whether the council offers value for money. Such a judgement is not a comment on a council's overall financial position, which in South Ribble's case last year, auditors concluded was "relatively healthy”.

However, the 2018 report did take the unusual step of making a “statutory recommendation” over concerns about gaps which the council then had in its management structure and the speed of implementing reforms which had been suggested by a local authority peer group.

Cllr Foster said he feared another critical assessment when this year’s accounts are finally signed off.

“I have a personal concern that we’ll be subject to further qualified value for money judgements as a minimum – I just hope there are no further qualifications on those accounts,” he said.

The 2018/19 budget out-turn report which was also presented to the scrutiny meeting shows that the authority recorded a revenue underspend of £312,000 during 2018/19, having set a balanced budget and delivered savings of £628,000 during the year.

The council's capital budget of £9.8m was revised down to £2.9m because of "slippage" in the delivery of projects. Most of the difference has been carried forward into 2019/20, but even on the revised figures, the authority still underspent its capital cash by £476,000 during the previous financial year.

South Ribble now holds £19m in reserves, of which around £15m is earmarked for specific purposes.