Damning interim audit report on South Somerset

Of all the councils in Somerset, only two, Somerset West and Taunton and Somerset County Council, possess signed off accounts for 31 March 2021.

South Somerset still only have draft accounts. Which means as another year is about to close, the previous one is still unfinished. Bear in mind the COVID 19 pandemic though. Auditors have had to work remotely and councils have had to cope with staff illness. It has not been easy. In addition all authorities in Somerset are working on consolidating their finances together to form the new unitary. But these are things all Somerset councils have in common.

But some have extra problems

An interim audit report published on Friday (24 March) by Grant Thornton tells a different story at South Somerset. In fact some of the items in the audit report are truly shocking. They describe problems such as “unnecessary challenge and inappropriate communication from some members of council staff” Elsewhere there is reference to “some behavioural issues” relating to council staff. They also note the impact of the “loss of key experienced staff in the finance team”.

This has contributed to delays in completing the audit, according to the auditors, every bit as much as the pandemic. And yet this is at variance with everything the authority tells us. Not a negative word has been said about staff. We are told the transformation project to cut staff and change work practices has been a great success.

So it is interesting to hear a very different view from an independent organisation.

Other things the audit report tells us is that working papers were not complete on time. To the extent that auditors had to stop work and go and work on other clients. Too few of the working papers required by the auditors had been provided. They note that questions raised by the auditors in June 2021, were not answered by council staff until January 2022. The auditors refer to papers being prepared by staff who then left.

Once again It appears that SSDC failed to understand the group accounts concept. Last year there were errors in respect of the joint venture with Opium Power. This year the same thing happened with Fareham Energy. The group accounts omitted this subsidiary from the consolidation of all the individual parts of SSDC’s operations. Corrected group accounts were only submitted to the auditors this month (despite the error being discovered in November 2021). Not only that but the valuation of the property owned by Fareham was carried out at the wrong date.

And there were other errors too. An adjustment of half a million pounds had to be made to the pension disclosure. The auditors noted that SSDC management had not carried out recommendations made in the previous financial period. And they say that when valuing properties, staff have used the wrong floor areas to come up with a figure. They add with a note of frustration, that this is the second year running this has happened.

And a lot of the audit work, especially the Value For Money audit work, is still outstanding.

Which means the audit fee will be significantly higher than budgeted. That’s not our assumption, the auditors say so.

All of which will leave South Somerset taxpayers with some serious questions about what is going on. And how reliable are the accounts and accounting systems of the authority.

Apology – our original piece erroneously stated SCC did not have signed accounts. They do and they were signed off in November 2021

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