The leader of the council Jason Brock told the Reading Borough Council (RBC) full council meeting on 25 June that he expected the accounts for the year ended 31 March 2018 would be made available for public inspection “imminently”. This was in response to a question from Liberal Democrat councillor Ricky Duveen.

Councillor Duveen also asked [at 0:38:06] for an explanation of why accounts for the year ended 31 March 2017 had still not been finalised “despite repeated assertions that they will be published soon.” He also asked “how much money has been spent on consultants sorting out the accounts” for the years ended 31 March 2017 and 2018?

Councillor Brock did not spare the man or woman on the Emerald 5 or 6 bus from the accounting jargon in his response about RBC financial statements for the year 2016/17. However, we learnt that:

The council’s 16/17 accounts have been under final review with our external auditors since 20 May and I’m pleased to say this is nearing conclusion. EY [Ernst & Young] have completed an internal peer review of their audit work and proposed opinion on the accounts.

[at 0:38:45]

He went on to say that he expected the accounts to be signed off in the next two to three weeks.

The accounts are usually approved at RBC’s audit and governance committee, but at the last meeting of the committee in April these accounts were thought to be close to completion so that this task was delegated to the chair of the committee, councillor David Stevens, in consultation with the chief financial officer (the ‘s151 officer’). The next meeting of the audit and governance committee will be on 23 July.

Councillor Brock set out the technical reasons for the continued delay in completing the accounts: re-casting, re-stating, and prior period adjustments, arising from private finance initiative (PFI) and property asset revaluations going back over more than ten years. Short and simple: valuations in the accounts were in such a tangle that they had to be undone and then reworked.

The price tag for consultants to do this work, including work on accounts for the year ended 31 March 2018 and improving accounting processes is £534000 so far.

A questioner is given the opportunity to ask a supplementary question and councillor Duveen asked:

Will the leader of the council please apologise to the people of Reading for the mishandling of our accounts and the waste of over half a million pounds… ?

[at 0:40:40]

In response, Councillor Brock said that, although it wasn’t technically a supplementary question (to clarify the answer), he understood the frustration and:

… felt that we have been let down… but what we want to do is put right the things which have gone wrong…

[at 0:41:15]

The second question, from Green Party councillor Josh Williams was also addressed to the leader of the council. Councillor Williams said that the previous leader of the council, Jo Lovelock, had blamed auditors KPMG for not identifying accounts issues currently being dealt with by auditors Ernst & Young.

Josh Williams asked:

Can the new leader of the Council tell us how much money Reading Borough Council has asked KPMG to refund for its inadequate work, to offset these spiralling costs ?

[at 0:42:06]

Councillor Brock did not accept councillor Williams recollection of the previous leader’s statement, although he said that:

After the 2016/17 accounts have been signed off, I will discuss the matter with my colleagues and with the chair of the audit and governance committee, being mindful of the need to ensure value for public money.

[at 0:42:51}

Councillor Williams’ then asked “will he publicly announce the decision he makes?” to which Councillor Brock replied “I’d be delighted to!”

Public inspection of accounts and deadlines

George Lovejoy (A Reading Borough Council auditor)
by Charles L Havell c1850

Public inspection of local authority accounts is a legal right. During the thirty working day period that they are made available:

  • any person can, ‘on reasonable notice’, inspect the accounts and certain related documents,
  • a local government elector for the area of the Council may ask the auditor questions,
  • a local government elector for the area of the Council may object to the accounts.

The National Audit Office has published a guide to exercising those rights.

The accounts for the year ended 31 March 2017 were delivered on time for public inspection at the end of June 2017. However a second draft was subsequently issued that summer which included:

  • updates to sections such as parts of the narrative foreword, that were highlighted in yellow in the first draft,
  • the inclusion of a 2016/17 cash flow statement,
  • revision of 2016/17 results in the group accounts. Group accounts include companies such as Reading Transport Limited, which are owned by RBC.

A year later on 1 August 2018 an ‘unaudited final draft’ of these accounts was discussed by the audit and governance committee. At that meeting, Councillor Jason Brock, then the newly appointed lead councillor for corporate and consumer services said it was “great that the end is now in sight”.

The accounts for the year ended 31 March 2018 should have been available for public inspection at the end of May 2018. Instead of the accounts, RBC posted a notice on their website which stated:

Under the above legislation Reading Borough Council’s accounts for the 2017/18 financial year are due to be opened to the public for inspection for a period of thirty working days from Friday 1st June 2018.

However, the Council has not yet finalised its accounts for 2017/18 and hence is not in a position to open the accounts for public inspection.

A further notice will be published as soon as practical, confirming the 30 working days that the Council’s 2017/18 accounts will be open for public inspection.

The accounts for the year ended 31 March 2019 should have been available for public inspection on 31 May 2019 but a notice of explanation has not even been posted on the council’s website.

The statutory government deadline for publishing draft unaudited local authority accounts for public inspection was accelerated by one month from 30 June to 31 May for years ending 31 March 2018 onwards. At the same time, the deadline for the final sign off of local authority accounts brought forward from 30 September to 31 July.

RBC currently has three years accounts which have not been signed off, two of which have exceeded the statutory deadline by a considerable margin.


Links
  1. RBC full council meeting 25 June 2019 – papers & webcast & questions from councillors
  2. RBC Audit and Governance Committee
  3. National Audit Office – Local authority accounts: a guide to your rights
  4. RBC website – Statement of Accounts
  5. The end of the financial year – would Mr Lovejoy approve?
  6. Mr Lovejoy has plenty of holiday reading!