Five-year wait as cash-strapped Stoke-on-Trent City Council's accounts to be signed off

The Civic Centre in Stoke -Credit:Stoke Sentinel
The Civic Centre in Stoke -Credit:Stoke Sentinel

Council accounts from five years ago are finally set to be signed off - following a 'significant delay' with an external audit. Stoke-on-Trent City Council published its draft statement accounts and governance statement for 2019/20 all the way back in July 2020, but they have still yet to be approved.

Council accounts must be audited externally to ensure they are accurate and to provide assurance to residents that they are getting value for money from their local authority. A council report says the delay with the 2019/20 audit has been delayed due to a 'variety of reasons', including a national shortage of external audit capacity, as well as issues identified within the council.

With the 2019/20 audit now 'substantially completed' by Ernst and Young (EY), members of the audit and standards committee will be asked to approve the 2019/20 accounts at their meeting next Tuesday. The council is set to receive a 'qualified' opinion on value for money from EY, due to three main issues: the 'inadequate' Ofsted rating for children's services in 2019; the financial challenges facing the council at the time; and issues relating to the administration of Court of Protection accounts.

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But council bosses believe that all these issues have been dealt with since 2020. A report to the audit and standards committee states: "As the external audit report covers events and areas of concern that were identified approximately five years ago these issues been widely publicised and previously reported externally and to previous audit committees. All of the issues were substantially addressed by the city council some time ago.

"The children's social care Ofsted inspection undertaken in October 2022 outlined the significant progress that had been made and returned an overall effectiveness score of 'requires improvement to be good'. There have been two independent external reviews undertaken by CIPFA and the LGA in relation to the city council’s financial position which have confirmed that although the city council faces significant financial challenges it is largely well governed and well managed."

The auditors also identified a number of 'misstatements' in the accounts, adding up to £5.5 million. But council managers do not believe these differences are 'material' to the council's financial position as a whole in 2020, and that 'relevant adjustments' will have been made in the meantime.

The external audit of councils was previously the responsibility of the Audit Commission, but it was scrapped and replaced with private firms by the coalition government in 2015. Since then, many councils have fallen years behind on having their accounts audited due a national shortage of auditors capable of doing the job.

The report to the audit committee states: "As is well publicised there have been national challenges within the external local authority audit market which has led to a significant backlog in the number of audits which remain outstanding at a national level.

"It is the view of management that this has also had a local impact and whilst some of the delays in the completion of the audit have been caused by the issues identified and some internal capacity challenges a lack of external audit capacity and in some instances the approach taken in relation to the audit have also been a significant cause of this delay."

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