Delays ahead!
Delays ahead!

South East Cambs Labour says South Cambs District Council has serious questions to answer as the final audit fee for 2018/19 balloons to £354,000

In a shock revelation in the papers for the audit and corporate governance committee dated 28 July 2022, it has now been revealed that the final figure for the 2018/19 audit was actually £354K, not £220K as previously stated.  This precipitated a considerable debate at the meeting between some of the councillors and the auditors EY regarding the justification for these huge fees.

Elizabeth McWilliams, South East Cambs Labour local government spokesperson notes: ‘I observed several of the audit committee meetings leading up to the final approval of the audited accounts for 2018/19 in April 2022.  During each meeting when EY was present, they made it clear that the audit was experiencing severe delays due to their having to ask the council for the same information on multiple occasions (or in corrected form).’

‘Furthermore, a great deal of hand holding had to be done, not least in ensuring that the data was migrated correctly to the new fixed asset register (FAR), which the finance team was struggling with.  This was hugely time consuming, as was noted by EY at several meetings.  If the committee was concerned about what was being done and the amount of time being taken, it should have challenged EY.  EY is a professional services firm that operates on the basis of hourly fees.  The Council knew this when they were engaged.  Surely more should have been done to ensure that the right resources were provided for the finance team to turn around requests in a more timely and accurate manner?’

Elizabeth continued: ‘The audit committee meeting on 1 December 2021 provides an example of the council’s delays and EY’s hand holding.  At this meeting EY explained that whilst the Council had provided a large amount of information to help EY resolve the problem of an unreconciled £2.2m in the FAR, it had not supplied an explanation as to how the officers worked through this information to reach the conclusion that the 2018/19 opening position was the correct one.  EY therefore had to create an example working paper for the Council, which had to be completed by the Council in order for the auditors to complete their work on the FAR.’

Elizabeth noted: ‘As a result of today’s exchanges, EY has been asked to produce a detailed breakdown of the delays and failures by the Council that led to the huge overrun in the production of the 2018/19 audit and the resulting huge fees.  They have warned the Council that this will make for grim reading for members of the committee.  We at South East Cambs Labour hope that lessons will be learned from it, as the estimated fees for the 2019/20 audit is £80K-£118K working on the assumption that there will be no delays unlike the 2018/19 audit.  If lessons are not learned, additional fees will be incurred again at the taxpayers’ expense.’

Finally, Elizabeth reflected: ‘It is shocking that the unacceptable delays in producing the audited accounts for 2018/19 not only meant that the public was kept in the dark regarding the Lib Dem administration’s use of council tax money for almost the entire four year period of their last administration, but that it also led to unprecedented audit fees of over £350K, money that could have been better used, for example, towards providing grants to charities and voluntary groups through community chest grants.  Also, we are sure that council tax payers will be frustrated that without this unnecessary waste, their council taxes would not have gone up by as much this year.’

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