Auditor criticises Northants County Council in damning new report

One Angel Square in Northampton
One Angel Square in Northampton

The ‘grave challenges’ being faced by Northamptonshire County Council have been hammered home in a damning new report from the authority’s auditor.

The interim report published by KPMG this week is highly critical of the measures the council has taken since it put in place emergency spending controls in February following fears that it might become bankrupt.

Auditors have accused the council of lacking a ‘clear action plan’, operating without a strategy and being at risk of ‘investing in projects that fail to deliver’.

‘Inappropriate user access’ of IT systems have also been flagged up in the audit report along with its capital programme not meeting the ‘accountability and transparency requirements’ set by central government.

The auditor also wants to look more closely at the recent sale of the Northampton head office One Angel Square.

The report comes just one week after the running of the authority was put into the hands of central government appointed commissioners Tony McArdle and Brian Roberts.

The experienced local government officers have the job of turning around the council’s fortunes and ensuring that it can balance its books this coming year.

If the job proves impossible then Northamptonshire will find itself in unchartered territories.

The authority needs to quickly pay back £12.7m into general reserves that it used to balance its books in April.

However, the KPMG auditors have questioned whether this is ‘achievable given the severe financial pressure.’

Liberal Democrat county councillor Chris Stanbra said the report has left him speechless.

He said: “This report really is a can of worms and it is hugely disappointing that it has happened this way.

“The most annoying thing of all is that politicians or council officers haven’t felt that they were obliged to share with people the full extent of this crisis.

“It has been fudged.

“The worst thing about it all is that it looks likely that this mess is going to be inherited by the new unitary authorities, which would not be right.”

The councillor, who represents the Oakley ward in Corby, said he now fears commissioners will start to get rid of any council services that the authority is not required by law to deliver.

He said: “My expectation is that the commissioners will now be getting the full financial picture laid out in front of them which may be much worse than any of us realise.”

Financial processes across the council have also been heavily criticised with claims that the authority has not reconciled its payroll in 2016/17 and that ‘VAT is not being fully reclaimed.’

Record keeping has also not been robust according to the auditors and it has found in 2016/17 the council issued retrospective purchase orders worth an estimated £137m.

The report, which will go before the audit and governance committee on Thursday (May 24) states: “The authority’s financial position has been under heavy scrutiny.

“It is more important than ever that those charged with governance are able to make properly-informed decisions based on clear and robust information.

“It is unclear how the finance reports currently provided to cabinet fulfil this function.”

It also states its analysis of the council’s financial outturn report suggests that the underlying  overspend for the last financial year was £59.6m rather than the much lower figure reported by the council.

New concerns have also been raised about the pension scheme being a ‘significant audit risk’ and the auditor has said that it will be employing its own financial expert to look into the matter.

Council leader Matt Golby, who was voted in as head of the authority in April, was not available for comment, but a spokesman for the  council said: “KPMG are commissioned as our auditors to carry out robust and impartial analysis of our finances and governance on an ongoing basis.

“Their reports, as well as the findings of the Government’s Best Value inspection, have helped to inform our improvement programme to address previously-highlighted issues with the council’s financial management and governance.

“Among the improvements already implemented, a new review process for expenditure has been introduced and all spend above £1,000 must now be approved by the Chief Executive Approval Panel to ensure that the expenditure is necessary, delivers best value for money and helps to achieve the council’s objectives.

“The Government-appointed commissioners are now working with us to continue to improve our finance and governance processes to ensure they are as robust and transparent as possible.”

KPMG will be carry out its final audit in the summer.