Council Accounts 2022/23 – Another dog’s breakfast?

On the 1 June 2023, we informed you that Folkestone & Hythe District Council had failed to publish their draft statement of accounts, for 2022/23, by the statutory deadline of 31 May, 2023. That was the second year in a row they failed to meet the statutory deadline to publish their draft accounts on time. The issue according to the Council was “resourcing challenges“.

However, it has emerged that there were other issues, according to the external auditor Grant Thornton. At page 4 of their Audit Findings Report of FHDC it states:

The Council originally published draft 2022/23 financial statements in Sept 2023. The statement of accounts did not balance internally, and management provided a revised set of draft 2022/23 financial statements in January 2024.

During the course of the audit we experienced significant difficulties in mapping the trial balance to the financial statements, and also challenges obtaining year end listings to support income and expenditure and debtor and creditor balances. This caused delays to our audit fieldwork and put the timeline three weeks behind schedule.

Were the delays to the 2022/23 accounts caused by “resourcing challenges“, or the fact the Council could not reconcile their trial balances and had to provide two sets of draft accounts for 22/23, to the external auditor Grant Thornton?

This would mean anyone who inspected the first draft accounts for 2022/23, would have inspected an imperfect picture. Unfortunately no-one was allowed to inspect the revised draft accounts for 2022/23 [the second set], so could not see any of the changes made internally to the revised 2022/23 draft accounts.

We know the Council’s accounts in 2021/22 were described as a  “dog’s breakfast” by an independent CIPFA qualified accountant. They have re-iterated the same sentiment for the 2022/23 accounts.

We previously asked if the Council were cooking the books. And given there were two sets of draft accounts for 2022/23, we ask the same question.

At page 31 of Audit Findings Report of FHDC it makes clear where some of the issues were.

A guide on How to read you councils accounts is provided by Research for Action.

What is of interest to us in particular, is the final statement on page 31; which says:

In the draft financial statements the single entity CIES did not agree with the Group CIES. Also, the opening and closing General Fund and Housing Revenua Account (and other reserves) did not agree with the single entity MIRS – the General Fund and HRA reserve positions were corrected in the revised draft financial statements but there is still inconsistency in other reserves, such as the Major Repairs Reserve.

The Major Repairs Reserve is for funding capital expenditure on the council’s housing stock and sits within the Housing Revenue Account. This would include roofing. For those of you who do not recall, there were substantial and significant issues around the contract with Premier Roofing according to the Council’s published data. The agreed cost for the roofing was close to half a million, yet nearly two point five million was spent. This led to a number of council officers leaving the Council

Is the Premier Roofing contract one of the inconsistencies the external auditor is referring to? We simply don’t know, as the terminology is rather opaque.

We note none of the  Councillors who sit on the Audit & Governance Committee raised the fact that two sets of draft accounts were produced for 2022/23. Were they turning a blind eye? We’ll leave you consider that. 

The Shepway Vox Team

Dissent is NOT a Crime