Two councils have failed to have their annual accounts signed off by auditors for the third year in a row, a report has revealed.
Auditors have been unable to give their verdicts on Rossendale and Scarborough BCs 2015/16, 2016/17 and 2017/18 accounts.
Earlier this year, Rossendale was forced to issue a warning about its long-term stability – citing an increasing reliance on dwindling reserves and a funding gap of £1m a year – while Scarborough has launched two new commercially-driven strategies in a bid to achieve the £5m savings it needs to make in the next three financial years.
Seven councils have still not received an auditor’s opinion for 2016/17, including Council of the Isles of Scilly, Northampton and Spelthorne BCs, Reading Council and Sandwell MBC.
The report by Public Sector Audit Appointments (PSAA) found 24 councils out of 357 audited (7%) have failed to get their accounts signed off by auditors for 2017/18 – a rise on the 4% recorded for 2015/16.
PSAA said the most common reasons for delays in issuing opinions on the 2017/18 accounts were technical accounting issues, errors identified during audit, lack of council staff available to support the audit, problems with the quality of supporting working papers and draft accounts being submitted late.
In addition, the PSAA report said auditors gave ‘non-standard’ conclusions to 32 councils in 2017/18, indicating concerns over issues typically relating to corporate governance, financial sustainability, procurement and contract management.
Four of these involved more serious ‘adverse conclusions’ issued to Birmingham and Derby city councils, and Somerset and Surrey CCs.
In August, a scathing report from auditors Grant Thornton revealed Birmingham’s financial crisis was deepening while in September Somerset announced revisions to its finances forced by the soaring cost of children’s services and accountancy experts warned Surrey faced a funding gap of £94m by March 2021 unless it takes drastic action.
Last week, a Derby City Council report revealed the authority could slash its workforce by 128 full-time positions as it tries to fill a £10m funding gap over the next four years.
