Sign-off of council accounts – further delays lie ahead
Auditors have had to examine legislation including one dating back to 1861
Scarborough Council’s external auditors have updated councillors on a long-running legal challenge that has led to the authority’s accounts not being signed off for the last five years.
The council’s 2017/18, 2016/17 and 2015/16 accounts were held up as the authority is locked in a legal battle with a group of residents over how it classifies income and expenditure from Whitby harbour.
Last year it was confirmed that the 2018/19 accounts had also been caught up in the row.
Last month, the chairman of the council’s Audit Committee, Cllr Andrew Backhouse, called the situation “unacceptable” and challenged the authority’s auditors Mazars to explain the repeated delays to councillors.
In a report that was due to go to the Audit Committee yesterday, Mazars has said that it has been required to examine financial statements of the council from every year since its formation in 1974.
The report adds: “To comply with the requirements of the Local Audit and Accountability Act 2014 we are required to carefully and thoroughly consider challenges made by local government electors.
“In the matter of the multiple challenges raised in connection with Whitby Harbour, this has been a time-consuming process, requiring analysis of a significant number of archived council records and involves legal interpretation of a number of statutes.
“A second provisional view was sent to the objector and council on 29 October 2019. We received a response from the objector’s QC and legal advisor which we are still considering.
“We have carried out additional procedures on the council’s accounts for Whitby Harbour and considered our own detailed legal advice.”
The auditors say they have had to examine several pieces of legislation, including one that dates back to 1861.
However, their update concludes that further delays could lie ahead even if it comes to a decision in the near future as any ruling would have to be scrutinised.
It adds: “Before we issue the ‘Statement of Reasons’ (the document setting out our conclusions), the view will be subject to detailed internal challenge and external review by Public Sector Audit Appointments.
“Once issued, the objector and council will have a period to respond to the statement before finalisation.”
The challenge has come from the Fight4Whitby pressure group which launched a legal challenge in 2016 citing the 1905 Whitby Urban District Council Act, which stated that income from Whitby harbour must be ring-fenced for use within the harbour.
Speaking during an Audit Committee meeting last month, Cllr Backhouse said the situation had to be concluded soon. He said: “I find it completely unacceptable that this is rolling on and on and on. I have never heard anything like this in all the time I have been on this council.”