Wiltshire Council blasted by auditors

8.06.00am BST (GMT +0100) Sun 4th Oct 2009

Jane Scott's Tories can't do sums

A damning report by auditors KPMG exposes the incompetence of the Conservative administration in Wiltshire. Errors in the draft accounts for the 2008/9 financial year amounted to a dramatic misplacement of funds - the council said it was in the black by £15.5million when in fact the figures put it £21.5million in the red.

The auditors found basic errors such as including grant income before any claim had even been submitted. They also found that assets had been double-counted.

The auditors report said "the draft accounts were of poor quality and incomplete". They've made 19 heavyweight, detailed recommendations for urgent improvement in the financial management of the council. As of today several significant problems remain unresolved and the accounts will not be approved by the external auditors within the published deadline.

Liberal Democrat Councillor, Chris Caswill says ""This is genuinely shocking. The Conservative leadership of the new council, which is broadly the same as the leadership of the old County Council, has some big questions to answer about how the council and its predecessor got into this mess with taxpayers money."

Lib Dem Councillor Malcolm Hewson has been through the report and believes it shows incompetence. "This is appalling! In the dry, measured auditor's language, KPMG have exposed incompetence at the heart of the Conservative administration of Wiltshire Council. It is hardly surprising that the Tories have just had to admit to a £3.8m projected overspend. How can the people of Wiltshire believe any financial figures they produce. The Conservatives cannot blame this on the government, nor bleat that Wiltshire County Council no longer exists. Wiltshire Council has the same leadership as Wiltshire County Council, the same basic organisation and the same Tories at the very top."

The largest single error was to the value of £42million and was caused by "errors in spreadsheets used to generate the Statement of Account figures".

The news of the bungle comes a week after the council revealed that it was already £4m overspent on this year's budget. "It's not clear yet how much of the 'lost' money is still to be found somewhere in the accounts and how much of it represents genuine losses," said LibDem leader Trevor Carbin, "but the potential of this debacle to impact on this year's account means we could be looking at a catastrophic situation as we go into the process of setting budgets for the next financial year."

Council leaders were also criticised for their lack of environmental awareness. "There are a number of policies and strategies aimed at helping to reduce their impact on the environment", said the auditors, "However we have not seen an overall high-level strategy or evidence to demonstrate a corporate understanding of the Council's environmental impact."

This reflects a common belief amongst Conservatives that talking about the environment is sufficient and that action is not required.

Here are some more extracts from the auditors report:

"In particular, the Income & Expenditure Account contained several errors. The effect of correcting these resulted in a material effect on the deficit for the year. In the version submitted to the Audit Committee a surplus of £15.5m was reported but in the latest corrected version this result has fallen by £37.0m to change to show a deficit of £21.5m."

"Additionally two of the primary statements, the Cash Flow Statement and the Statement of Total Recognised Gains and Losses, were not included in this first draft. The Cash Flow Statement and supporting notes are still not included in the accounts."

"The quality of this first set of accounts was very poor, especially given that a specific recommendation was made in our 2007/08 Report that the Statement of Accounts should be subject to thorough review before submission for audit."

"The draft accounts presented for audit were of poor quality and were incomplete, and the supporting working papers were also well below the standard expected."

If you'd like to see the full report it's at

http://194.72.162.210/documents/dscgi/ds.py/Get/File-22958/Item_No.08_%28a%29_-_Report_to_those_charged_with_governance_-_Audit_of_the_County_Council%27s_accounts.pdf

In their defence the council attempts to blame the previous post-holder:

"The preparation of the 2008-09 Statement of Accounts for the former County Council was undertaken by the former County Council Chief Finance Officer. Review of the process shows it was inadequately resourced and planned. In hindsight with the great level of change in progress in terms of the new Unitary Council, it would seem a sensible approach for the County Council to have requested the 1 month extension to the preparation of accounts and offered in the relevant regulation. However lessons will be learned and a properly resourced plan will be prepared for the preparation of the accounts 2009-10."

And the council's spin department has come up with the following press release:

"Wiltshire Council is currently financially healthy with reserves of over £16m.

The council's accounts are not in deficit as recently reported. Adjustments made to accounting entries related to issues reflecting depreciation and revaluation of council assets.

Recently appointed chief finance officer, Martin Donovan, said: "The external auditors were commenting on the draft accounts which had not taken account of the revaluation of assets due to the recession. As the incoming finance officer I have worked with the external auditors since June finalising the council's accounts.

"I would like to make it clear that, contrary to reports, the council's finances have not moved from showing a surplus of £15.5m to a deficit of £21.5m. We are in a healthy position and our reserves of £16m are in line with our budget plan for this year." "

(End of press release)

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We look forward to seeing the final accounts with the 'adjustments' made to compensate for the glaring errors and mismanagement identified by the auditors. Note also that the officers are being wheeled out to deal with the problem whilst the responsible politicians are conspicuous by their absence. So much for the cabinet system bringing in 'accountability'.

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