FI15278

Request

  1. Since 2021 the Council's annual accounts have not been signed off.  Why is this the case?
  2. Please provide copies of all relevant correspondence between the Council and its auditors on this aspect of the accounts, that is, why they have not been signed off.  That is copies of communications asking for information from the auditors and the Council's replies.
  3. What action has the Council taken to rectify the situation and have the accounts signed off?
  4. Have any other parties apart from the Council and auditors been involved for example the Police or the Local Government Ombudsman?  If so, please specify.

Response

1. This is part of a national problem that has been growing over several years. In 2021 the House of Commons Public Accounts Committee said, "Without urgent action from government, the audit system for local authorities in England may soon reach breaking point". That was correct and subsequently local audit effectively collapsed in England. There are 317 local authorities in England and the number of outstanding audit opinions peaked on 30 September 2023 at 918, so an average of almost three sets of accounts per authority. The situation has slowly started to improve and as at 31 December 2023, the backlog of outstanding audit opinions stood at 771, but even then, just five out of 467 local government bodies' 2022/23 audit opinions had been given by the publication date of 30 September 2023.  The first audit for Dover that was significantly delayed was the 2019/20 audit which was only completed on 1 December 2022. However, once an audit is delayed it can have a knock-on impact on subsequent years as the accounts for those years cannot be completed until the opening balances from the delayed years are available.

2. The Council is in frequent e-mail contact with its auditors, Grant Thornton and over the period concerned will have well over 200 messages. From our preliminary assessment, we have estimated that the cost of complying with your request would exceed the 'appropriate limit'.   The appropriate limit has been specified in regulations and for Local Government it is set at £450. This represents the estimated cost of one person spending 2½ working days determining whether the information is held, locating, retrieving and extracting the data. I regret therefore that on this occasion I must refuse this part of your request in accordance with Section 12(1) of the Freedom of Information Act.

3. In July 2023, the Minister for Local Government published a Cross-System Statement to Parliament setting out proposals to tackle the backlog. Since then, organisations involved in the regulation and oversight of local audit ("system partners") have been working collectively to agree a proposed solution to clear the outstanding historical audit opinions and ensure that delays do not return. To clear the backlog of historical accounts and 'reset' the system, the Department for Levelling Up, Housing and Communities (DLUHC) put a date in law (the "backstop date") – 30 September 2024 – by which point local bodies would publish audited accounts for all outstanding years up to and including 2022/23. The backstop date is likely to be a factor in local auditors issuing a modified or disclaimed opinion on outstanding accounts if they do not have enough time to complete all audit work before that date. The Council has therefore taken the following steps:

  • 28 March 2024 – the Council's Governance Committee agreed to "disclaim" the outstanding historic accounts in accordance with the Department for Levelling Up, Housing and Community's measures.
  • 27 June 2024 – the Council published the 2020/21, 2021/22 and 2022/23 Statement of Accounts.
  • 26 September 2024 – the Council published the 2023/24 draft accounts, and the audit of these accounts started in November 2024.

4. No other parties are directly involved in the publication of Dover's accounts. At a national level the parties involved ("system partners") are  the  Ministry of Housing, Communities & Local Government (MHCLG); the National Audit Office (NAO); Public Sector Audit Appointments Ltd (PSAA); the accountancy institutes: the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Institute for Chartered Accountants of England and Wales (ICAEW); the Financial Reporting Council (FRC) and its successor Audit, Reporting and Governance Authority (ARGA); and audit firms such as Grant Thornton at Dover.