Reading Borough Council (RBC) policy committee on 12 March was not provided with an update on progress towards completing accounts for the year ended 31 March 2017. Papers were presented in an eerily hushed council chamber and the meeting ended after less than half an hour.
Surely the accounts must be signed off soon?
Two weeks now remain of the five weeks work that interim strategic finance director Peter Lewis told councillors at the February policy committee that the auditors were about to embark on.
Accounts have been closed and submitted and are virtually ready to be signed off, there are still some minor queries to be addressed and those are being addressed.
He was responding to councillor David Stevens, chair of the audit & governance committee, who had set out the case for why the conservative group could not support the budget and the setting of council tax until the audit was complete [at 1:40:05].
In the shadow of the ongoing delay in finalising the accounts, financial matters in all the rainbow of colours reflected in an accountant’s eyeshade made up the agenda.
Councillor Ed Hopper [at 0:14:50] poked a stick at the ongoing audit process when he asked if the fraud relating to cancellation of parking tickets, recently reported in the local press, had been discovered by the external auditors in finalising the accounts.
Peter Lewis replied that he believed that the fraud had been identified by the whistleblowing policy [at 0:15:48].
Budget Management and Reconciliations
The budget monitoring report is a regular agenda item at the policy committee and was comforting on the improved management of the council’s finances this year:
It is noteworthy that the graphs illustrate improved financial projections and control in 2017/18 than in previous years, despite the pressures that are upon the budget.
Words of warning on income due from the NHS for the year ended 31 March 2017 appeared later in the report. It was explained that RBC were behind in issuing invoices to the NHS partly because of changes to NHS requirements for how they should be invoiced for funded nursing care.
The impact of the delay poses some financial risk, which could affect the income accrued [expected] for 2016-17 and NHS income assumptions on income for 2017-18. This is still under investigation and there is some risk, though the assumption for this forecast, is that income is in line with the December forecast.
The problem with NHS income was uncovered in January when a comparison was made between two RBC financial systems; ‘Mosaic’, the social care case management system, and the ‘Fusion’ accounting system.
RBC internal audit reported to the audit & governance committee in September 2017 that there had been improvements in use of the Mosaic system for children’s social care but weaknesses remained in adult social care saying:
However, there is still no clear year end reconciliation between Mosaic and Oracle Fusion for adult social care.
Audit problems cost money
The extra work and time that external auditors Ernst & Young are spending on auditing last year’s accounts is expected to cost the council an additional £100,000 over that budgeted. The bill for the 2015/16 audit was £220,735 which was 71% above original expectations.
And finally …
Leader of the council, Jo Lovelock noted that this would be the last policy committee for interim strategic finance director Peter Lewis, thanked him for his efforts and wished him all the best for the future [at 0:19:17]. RBC have appointed a permanent Resources Director, Jackie Yates who will take over before the end of March.
- RBC policy committee 12 March 2018 papers & webcast
- Completion date for last year’s RBC accounts still unknown
- RBC Council meeting 28 February 2018 – papers & webcast
- Up Holy Brook without a paddle: Interview with Audit and Governance Chair
- Melissa Holloway received a suspended sentence at Reading Magistrate’s Court after losing her job at Reading Borough Council – Reading Chronicle
- RBC whistleblowing policy
- Audit & Governance Committee 28 September 2017 – Internal Audit Quarterly Progress Report
- Ernst & Young
- Council audit fee for last year increases by 71%