Concerns raised over Northamptonshire County Council's relationship with external auditors

Northamptonshire County Council has still not built up a good relationship with its new external auditors after concerns over their lack of attendance at meetings.

By James Averill
Wednesday, 8th April 2020, 8:27 pm
Updated Wednesday, 8th April 2020, 8:30 pm
The county council discussed its relationship with Ernst & Young at a full council meeting
The county council discussed its relationship with Ernst & Young at a full council meeting

The county council recently changed their external auditors from KPMG to Ernst & Young (E&Y), but the new relationship appears to have got off to a rocky start.

In February, the new auditors said there was a risk the millions spent so far on unitary reorganisation may not be value for money.

But members of the council’s audit committee are frustrated that E&Y were not present at the last meeting, as is usually the case, to present their findings.

In a written report to councillors last month, the independent chairman of the audit committee Bill Jessup said: “The committee has yet to build a meaningful relationship with the new auditors, E&Y. They were limited in what they could do until the 17/18 accounts were cleared by KPMG.

“E&Y submitted a progress report to our meeting in February but because of diary conflicts they did not send a representative to the meeting so we were unable to discuss the report with them.”

But the lack of a relationship between the two organisations led to some concerns being raised by councillors at last month's full council meeting (March 19).

Commenting on Mr Jessup’s report, Liberal Democrat leader Councillor Chris Stanbra said: “What’s worrying to me is what he says about the relationship, or lack of it, with E&Y at the moment. Hopefully that's something that can be rectified fairly soon and he says he wants to do that at the next meeting.

“It’s an important relationship for the future of this council and for money we may or may not have to spend on audit. Especially given what E&Y said in their last report over concerns they may have on value for money on certain items of expenditure. So I hope if they’re listening, that they build a relationship please.”

Council leader Matt Golby added: “There is some concern about the relationship and the capacity with the new appointed auditors, and that’s something we talk about regularly in the high level strategic meetings we have, and it’s being noted and fed back to the likes of MHCLG to recognise some of the concern around that relationship.”

But Barry Scarr, the county council’s chief finance officer, said the relationship between the two parties was still in ‘very early days’.

He said: “They have just taken over and have been able to start the 18/19 audit. Committee members and internal auditors have expressed concerns over the lack of attendance at the last meeting, and E&Y have been invited to the next meeting to present their side and case and the way they’re conducting the audit.”

In the report seen by councillors, Mr Jessup also said he ‘did not understand’ an alternative timetable being brought forward by E&Y that suggested that the audit of the 18/19 accounts would not be completed until the turn of the year and the audit of the current financial year would not be finished until November 2021. However, that timetable may have been affected even further by the coronavirus outbreak.

Last year, E&Y had to delay a number of other audits it was doing in the country, including the district and borough councils in North Northamptonshire, due to staffing issues.