Council’s long delay in signing off accounts
ROBIN HOOD COLLAPSE AND ASSETS VALUATION HOLD UP AUDITING
NOTTINGHAM City Council will be 16 months late signing off its full accounts due in part to the collapse of Robin Hood Energy and problems related to valuing its property.
Auditors have still not been able to sign off the full accounts for the year 2019/2020, which should have been completed on November 30 last year.
The council has now said it is unlikely the accounts will be ready until March next year. Dozens of other authorities are in a similar position because of ongoing problems in balancing local authority budgets in the wake of the pandemic.
The Labour-run authority says it has been unable to finalise the statements of accounts for 2019/20 due to two outstanding issues which is also affecting the 2020/21 Statement.
These are the collapse of the council-run energy company, Robin Hood Energy, which went into administration in January 2020.
There have also been problems with the valuation of the council’s 75 specialist assets, which includes Wollaton Hall, Nottingham Tennis Centre and the Theatre Royal and Royal Concert Hall.
Robin Hood Energy auditors Mcintyre Hudson had completed the majority of the RHE audit work for 2019/20 but the company went into administration before the audit was signed.
Once in administration, there was no requirement for them to do so or for a set of accounts to be filed at Companies House, the council said.
Avenues are being pursued to obtain accurate financial data up to the point of entering administration.
In previous years the council has used its in-house design team to value the 75 specialist properties that are included on the council’s balance sheet.
Before the 2019/20 audit work could be completed, the council disbanded its in-house design team as part of the 2020/21 interim budget arrangements.
As a result, valuations were not undertaken and audit queries could not be answered.
Further enquiries revealed that supporting files and documentation could not be located and the only option available was for the council to commission external valuers to carry out these valuations.
The council is now requesting all departments send through any copies of floor plans and architects’ drawing for operational buildings on the asset register that they hold.
It has also started a process to capture details of when major components in the buildings were last replaced and descriptions of any major works that have resulted in changes to the footprint of the property in the past five years, including extensions.
It has also instructed an internal audit to review the decision to abolish the design services team and will produce a report on “lessons learned for the future”.
The 2019/20 draft statement of accounts was published in August 2020 in accordance with the statutory deadline but was “incomplete”.
As this work needs to be completed and then audited, “it is unlikely that the accounts can be signed off before March 2022,” the
council said.
Councillors on the council’s audit committee are set to discuss the issues on Friday.
A council spokesman said: “We have published our accounts on time.
“However, like more than 90 percent of local authorities across the country, the financial audit of those accounts has not yet concluded.
“We’re working with our external auditor to ensure that this happens as soon as possible, but there are no direct implications of this delay for the council.”