Wiltshire Council’s annual accounts troubles – By Local Democracy Reporter Aled Thomas

THE annual accounts required by law to be produced by Wiltshire Council have not been audited and approved for several years.

A report to councillors earlier this year said, “The 2019-20 Statement of Accounts remains outstanding, and progress of the issues and audit has been disappointingly slow, especially over recent months where some additional work has been required to address further historic errors and misstatements found in financial accounting entries and disclosures.”

But progress seems to be hampered by a disagreement between council staff and its auditors Deloitte.

A report by Deloitte in May said, “We request a formal decision as to whether the council is prepared, and whether it is realistic, to commit the resources required to allow completion of the outstanding 2019-20 audit work and to remediate the identified issues in order to undertake the 2020/21, 2021-22 and 2022-23 audits.”

Poor quality

The report says issues previously identified include, “An inability by the council to adhere to the deliverables timetable; poor quality of accounting papers and schedules supporting figures within the underlying accounting records and draft financial statements; a poor quality of draft financial statements, a high volume of identified control deficiencies; and a high volume and quantum of errors identified both in relation to the year under audit and prior years.”

It adds, “The difficulties in the 2019-20 audit highlight the need for a detailed review of the financial statements by suitably qualified and experienced individuals as well as a detailed review by a senior officer before they are published in draft. We recommend internal audit are engaged to undertake a comprehensive review of the key financial controls necessary to produce reliable and timely financial reporting.

Significant investment needed

“We do not consider the current number of staff involved in the production of the financial statements to be sufficient to deliver reliable and timely financial reporting. Significant investment is needed by the council in technical accounting skills given the level of contractor resource currently supporting the production of the financial statements.”

Deloitte says it believes if resources are not devoted then the company may have to issue a disclaimer of opinion for the 2019-20 accounts, and the three following years – a potentially serious step meaning external auditors cannot speak for the accuracy of accounts.

But in a response to the report the council itself said, “There are sections and items within the report that the council officers agree with, some that they perceive as being misleading, and others that they do not agree with.”

In response to the claim that the council wasn’t devoting enough to getting its reporting right, a report by Andy Brown, Wiltshire Council’s corporate director for resources and deputy chief executive said, “Officers consider that it is the amount and complexity of the historic errors that is impacting on the timely completion of the 2019/20 accounts and audit and not the level of resource.

“The council takes full responsibility for the delays that have been caused due to the historic poor quality of the draft financial statements and the accounting papers and schedules supporting the accounts.

Action plan

“Focus within the council’s team is firmly on carrying out all work required within the action plan and to provide assurance on the values of fixed assets in the accounts so that the 2019-20 accounts and all subsequent accounts are free from material error and misstatement.

“We will continue to work with the external auditors to plan the work required and ensure resources are available to support this work for both parties.