County audit costs soar

In recent months Somerset County Council auditors have been unable to finalise their report. The sticking point is the so called “Value for Money” audit. This is a bit of an odd name. The report is not really about value for money as you or I would know it. Instead it is all about the medium term sustainability of our county council.

Back in July the auditors Grant Thornton, explained they could not form an opinion. Bizarrely this was an improvement on 2017/18 when they formed an adverse opinion. In effect saying they were uncertain of the medium term viability of Somerset County Council.

They would have to do more work. As a result taxpayers in Somerset will be left to pick up a tab of a further £32,800 for various extra work because SCC could not demonstrate medium term viability the first time around.

However Grant Thornton are still not saying they can give a clean opinion on the “Value for Money” audit. They are prepared to say things have improved since last year. That much is consolation. But some of the complacent noises coming out of County Hall may need to be reigned back a bit.

There are some good things to take from this. But in the auditors own words “Our VFM conclusion covers the whole of 2018/19 and we note that at the start of the 2018/19 year it was the poor budget setting process that resulted in the need for reactive emergency measures to identify and deliver further savings to balance the budget.
The Council is on a journey and we recognise that it is still needs it demonstrate it can set a realistic and achievable budget that it can deliver to.”

And more to the point it rather looks as if SCC will not get a completely clean audit report. We’ll let Grant Thornton explain in their own words…..

The Council set its original 2018/19 revenue budget in February 2018. Early in the financial year it became clear that this budget did not accurately reflect the Council’s spending commitments and the pressing need to deliver further savings. In order to address these issues, the Council took several actions, including:
• setting a new more realistic budget for children’s services
• identifying and delivering additional savings
• making greater use of capital receipts to fund service transformation.
The Council has increased its general fund and earmarked reserves from £23.7 million at 31 March 2018 to £44.2 million at 31 March 2019 (excluding school reserves). Despite this increase, these levels of reserves remain low in comparison to similar councils and provide limited capacity to absorb unexpected future financial pressures.
These matters are indicative of weaknesses in the Council’s arrangements for strategic financial planning. They are evidence of weaknesses in proper arrangements for sustainable resource deployment in planning finances effectively to support the sustainable delivery of strategic priorities and maintain statutory functions.

One comment

  • Sounds as though SCC needs to find someone who can prepare a more realistic budget in their Accounts Department. May save the Audit fees in future years!

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