Grant Thornton telling lies? You decide.

Grant Thornton is under investigation for it’s audits and earlier this year the Chief Executive of Grant Thornton informed the business, energy and industrial strategy committee  “we’re not looking for fraud“.

Grant Thornton are Kent County Council’s auditor, they are also the auditors of all 12 Councils in Kent. Now the reason they are NOT looking for fraud is – auditors are essentially only now required to check that the accounting rules are followed. They are not required to check that the accounts are true and fair any more.

We find this alarming, as this could mean that fraud might be happening in all Council’s in Kent and we’d be none the wiser, as Grant Thornton aren’t looking for it. We just hope the fox is not in the hen house.

In July 2017, our public face made three objections to Kent County Council’s accounts for the financial year 2016/17.  The objections were related to LOBO Loans, Double Payments and PFI’s. The first two have been dealt with – inadequately we believe –  by KCC’s auditor, Grant Thornton. However, the third item – PFI –  is still outstanding. KCC have 14 PFI contracts.

At the last Audit & Governance Committee held on the 24 April 2019, KCC Cllr Martin Whybrow (Green) asked for an update on where Grant Thornton are with regards to answering the PFI part of the objection.

Grant Thornton’s representative on the day was Mr Andrew Mack, Director and Head of Audit Quality and Public Services Assurance FCPFA, so a significant person working for Grant Thornton.

Mr Mack informed the committee, openly, that Grant Thornton had met with the National Audit Office in the week of 15th – 19th April 2019, to discuss issues relating to PFI. He hoped that a response to the PFI objection would be ready and prepared for the committee by the next meeting on the 24th July 2019.

So we took the time to contact the National Audit Office, as you do, regarding Mr Mack’s statement, and the NAO came back with the following statement:

Screenshot from 2019-05-17 09-54-30

Mr Mack’s response to Cllr Whybrow and the Audit & Governance Committee was not a honest one, in our honest opinion. Those at KCC have been kinder, as they deemed it as a “misleading  statement“. They could not, nor would not comment any further on the matter.

So we ask you do you feel assured by Mr Mack’s statement bearing, in mind he is the Head of Audit Quality, and Public Services Assurance? We certainly DO NOT we feel assured.

As the NAO say in their statement KCC’s draft minutes for the Audit & Governance Committee on the 24th April 2019, does have a clarification made by Mr Mack. This an almost unprecedented step that KCC have taken, to amend the minutes. The clarification at Para 22 states:

  • Mr Mack would like to clarify that the meeting was a Briefing Session held by the NAO and attended by a number of audit firms, and not a meeting called to discuss PFI…

We really do NOT feel assured by the Head of Audit Quality and Public Services Assurance, Mr Andrew Mack’s clarification either.

Moving on Grant Thornton charged KCC the sum of £13,490 pounds to investigate the the LOBO Loans & Double Payment objections, on top of their £156,000 pound annual fee for auditing the accounts. Both objection responses are inadequate, as neither make clear how much work was undertaken on the two objections cited. We would ask Grant Thornton to disclose and itemise what they did to earn the additional fee of £13,490.

Screenshot from 2019-05-17 10-20-40

The final PFI objection remains outstanding. This has been the case for nearly two years. We hope Grant Thornton do finally answer the objection in July 2019. We would expect the response by Grant Thornton to be 100% honest and NOT “misleading“, like the statement made by Mr Andrew Mack. We would also ask them to itemise the work they undertook to earn any fee which may be paid.

Did Grant Thornton lie to the Audit & Governance Committee on the 24th April 2019? Or did they just mislead them? We’ll leave you to decide that.

The Shepwayvox Team

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1 Comment on Grant Thornton telling lies? You decide.

  1. An Anonymous GT Accountant // May 19, 2019 at 12:01 // Reply

    GT received the largest ever damages bill for any auditor in the UK back in Feb 2019 –

    Justice Bryan said Grant Thornton’s work was “negligence of the highest order” and a “flagrant breach of duty” that undermined public confidence in accountancy firms. He said Grant Thornton, Britain’s fifth largest accountant, failed to apply appropriate professional scepticism when signing off Assetco’s accounts, meaning that dishonesty by some senior executives was not exposed and the company ran up significant trading losses.

    “Grant Thornton’s failings were very serious, indeed flagrant breaches of duty,”

    As an accountant, not an auditor, at GT, this is still going on and is worse in local government than private companies, according to meetings I sit in on regularly.

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