External auditors blamed for delays to local government accounts

“Auditors scrutinising local authority accounts and the body responsible for appointing them have come under fire after new figures showed 40% of audit opinions missed the target date of 31 July.

Public Sector Audit Appointments (PSAA), the body responsible for appointing auditors, this week revealed that 210 out of 486 audit opinions on local government bodies for 2018/19 were not delivered on time.

The figure has jumped sharply from last year, when only 13% of opinions missed the deadline.

Graham Liddell, managing director at financial reporting consultancy LPFG and former senior technical manager at the Audit Commission, said: “This is a failure of the audit firms and of PSAA who appointed them.

“Of course, local authorities can make improvements, but by and large local authorities delivered the accounts, and by and large auditors failed to audit them.

“All the audit firms have enough staff to deliver their portfolio of local authority audits, it is just that they have chosen to maintain their margins and prioritise other sectors.

“I have immense sympathy for public sector audit teams who have been a handed an impossible job by their employers, but none for the firms themselves.”

He said that PSAA has presided over a process which has seen audit fees driven down to unsustainable levels.

“The big question is what does it do next? For a start, PSAA needs to stop defending auditors and blaming local authorities.

“It then needs to think carefully about audit fee rebates and how loudly it is going to name and shame the culprits.”

In a statement, the PSAA said a number of factors had driven the deterioration in performance, including, in some cases, a shortage of appropriately skilled and experienced auditors.

It said that, in other cases, the standard and timeliness of draft accounts, or working papers, has been lacking.

Other delayed opinions arose from difficulties in obtaining responses to and resolving audit queries, and unresolved technical issues including matters arising within group accounts, it said. …”

Auditors and PSAA slammed after jump in accounts deadline failures

Dramatic rise in delayed local government audit opinions

“Urgent improvement” is needed after a sharp rise in delayed audit opinions in local government, said the organisation that appoints auditors to 98% of council, police and fire authorities.

More than 40% of audit opinions (210 out of 486) on 2018-19 statements of accounts missed the target date of 31 July, figures released today from Public Sector Audit Appointments showed. Last year, just 13% were not available by the target date.

Tony Crawley, Public Sector Audit Appointments’ chief executive, suggested the rise was because of a lack of skills and poorly filled out paperwork.

“The challenge for all of the parties engaged in the accounts and audit process is to address the need for improvement urgently,” he said.

Accounts and working papers needed to be “prepared to the right standard”, Crawley explained, and auditors should have “sufficient appropriately trained and skilled staff”.

He added PSAA “looks forward” to working with the government on its review of the local audit system, which is expected to include the timeliness of audit opinions within its scope.

Crawley added: “There is also a need to address the more strategic challenges which arise from the current debates about auditing following various widely reported financial failures in the private sector.”

Although the deadline date for audit opinions is not statutory, auditors and audited organisations strive to meet it when possible, and bodies that do not do so must issue a statement explaining why they were unable to. …”

https://www.publicfinance.co.uk/news/2019/08/psaa-records-dramatic-rise-delayed-audit-opinions

EDDC “Independent” Leader firmly nails his colours (blue?) to his CEOs mast

 

Owl sees no “misunderstanding”.

Another “TiggerTory” policy?

And what does Mr Marchant, the person accused of being “misunderstood” – and Ford’s QC who perpetuated the “misunderstanding” several times at the public inquiry – think about this?

And where’s Councillor Hughes’s explanation for not sharing information about the meeting with other councillors, particularly those on the Development Management Committee – or did he share it with only a select few of his colleagues?

Remember, the Development Management Committee is a STATUTORY committee with rules and regulations … and it must NOT be subjected to party whipping or interference, nor must they “avoid undue contact with interested parties”.

https://www.local.gov.uk/sites/default/files/documents/planning-committee-manage-1cd.pdf

EDDC CEO tries to slither out of responsibility (NOT successfully!) for his planning advice to developer in private meeting

Owl has SO many questions!

First, Mr Williams’ ‘explanation’ defies belief, he basically accuses the developer of lying about the meeting. Then, he issues his denial of the circumstances of the event to the press, rather than to the councillor who asked him for an explanation. THEN, there appears to have been a totally undocumented meeting between him, Stuart Hughes and the developer – something that is extremely worrying – how many other such meetings with developers and hand-picked councillors have occurred? How do they happen?

But judge for yourself from the full text of the DevonLive article.

Owl thinks the very least EDDC majority councillors should do is suspend him until this is satisfactorily sorted.

“Calls have been made for an independent investigation after East Devon District Council’s chief executive allegedly told developers to appeal his own council’s refusal of planning permission for the Sidford Business Park.

East Devon District Council in 2018, on the grounds of harm to highway safety, relating to increased heavy goods vehicle usage of the area’s narrow roads, refused the plans for land, currently used for agriculture, the east of Two Bridges Road in Sidford.

A larger scheme submitted by the applicants was rejected previously by the council in 2016.

Applicants Tim and Mike Ford challenged the 2018 refusal of the council and three days of arguments for and against the development took place in July.

At the planning inquiry though, Richard Kimblin QC, on behalf of the applicants OG Holdings Retirement Benefit Scheme, and Joseph Marchant, their planning agent, said that following the refusal of the 2016 scheme, Mark Williams, the council’s chief executive, advised them they should appeal.

The claims, made both in writing and verbally, were unchallenged by East Devon District Council during the inquiry.

Paragraphs 13 and 14 of the Mr Kimblin QC’s final closing arguments at the Inquiry said: “After the 2016 application was refused, there was a meeting with Councillor Stuart Hughes and the CEO of the Council. The CEO advised that the way to progress was to appeal. That is an extraordinary state of affairs.”

Following a request for comment from the Local Democracy Reporting Service on the remarks allegedly made by Mr Williams, an East Devon District Council spokesman said that the he did not advise the appellant of anything, the applicant chose to interpret the comments he did make as encouraging an appeal, and the comments were made in a ‘situation where a degree of hyperbole and exaggeration is not unusual’.

Cllr John Loudoun, who represents the Sidmouth Rural ward, though has called for an independent inquiry into the meeting and the comments, saying that the while the council says there was a ‘misinterpretation of events’, “misinterpretation is a nice way of calling someone a liar.”

The claim that was made by Mr Marchant was set out in his written evidence to the inquiry, which said: “Subsequent to the refusal of the 2016 application, an approach was made to Members, including Councillor Stuart Hughes and the CEO (Chief Executive) of EDDC, Mark Williams.”

The following paragraph added: “We were advised by Mark Williams….that in his opinion, the applicant (Fords) may make more advance in progress towards delivery through appealing the Council’s decision to refuse the 2016 planning application rather than resubmission.

Paragraphs 13 and 14 of Mr Kimblin’s final closing arguments at the Inquiry added: “After the 2016 application was refused, there was a meeting with Councillor Hughes and the CEO of the Council. The CEO advised that the way to progress was to appeal. That is an extraordinary state of affairs.”

Asked to comment on the claims made at the inquiry, an East Devon District Council spokesman said: “The council officers and legal representative, acting on behalf of the local planning authority, did not consider the comments made by Mr Marchant or the appellant’s QC as material in specifically defending the reason for refusal, which is of course their role in the inquiry.

“The simple point is that the circumstances described have no bearing or relevance to the local planning authority’s decision and nor therefore to the focussing of all of their efforts in seeking to persuade the Inspector that the proposed development was unacceptable.

“As for the meeting itself, as was made clear at the inquiry the CEO was asked by the applicant/appellant to facilitate a meeting between them and Cllr Hughes to ascertain what options there might be available to them in the light of the refusal of planning permission.

“At the meeting, as reflected in Mr Marchant’s proof of evidence, Cllr Hughes expressed his opinion that he could not foresee any circumstances under which planning permission would be acceptable, notwithstanding the Local Plan allocation.

“The CEO did not advise the appellant of anything, but expressed the view that there were therefore three potential options open to the applicants: resubmit with changes to the proposed scheme; appeal the decision; or walk away from the site.

“The applicant appears to have chosen to interpret this as encouraging an appeal and we would note that the comments from their QC were in the context of also making an application for costs against the council – a situation where a degree of hyperbole and exaggeration is not unusual.”

However Cllr Loudoun said that having read the council’s response, he was even more convinced of the need for what he originally asked for, a genuinely independent inquiry in these issues, and he was appalled that the response to his concerns was sent to the press and not him.

He added: “Evidence provided at the Inquiry was fully tested by both the Council and the applicants’ representatives because this is the way in which facts are established or challenged. The statements made verbally and in writing by Mr Marchant for the appellants are, according to the District Council statement, misinterpretations of the events and comments at the meeting involving the Chief Executive.

“This is an extraordinary state of affairs as we now have a challenge to Mr Marchant’s evidence at a point where he cannot defend himself and after the point when the Council allowed the statements to be accepted as fact. It would appear that the Council is now saying that Mr Marchant spoke untruths and that these were untruths were in turn repeated by the applicants’ QC.

“They are essentially accusing them of lying. When it was raised in the inquiry, no-one complained about it and or questioned it. To me, saying it was a misinterpretation is a nice way of calling them a liar.”

He added: “The Council’s statement is disingenuous in that it tries to down play the quotes of what the Chief Executive said as put forward by the applicants’ QC as “hyperbole and exaggeration” whilst pursuing a costs order. This ignores the fact that Mr Marchant made the claims whilst giving evidence and that the appellants’ QC repeated them not only in his arguments for costs but also, and more importantly, in his broader closing submissions in support of the applicants’ case.

“It was not a throwaway comment as it was in the both written and verbal statements and made by two people.

“I am even more concerned having read the Council’s public response to these matters and I am now even more convinced of the need for what I originally asked for, a genuinely independent inquiry in these issues.

“If he did say that they should appeal then he has it then he was undermined the officers, the council and his role on a very serious issues, and if not, then why wasn’t it challenged at the inquiry?

“I am bemused at the response from the council to this matter which seems to be now turning into as much a focal point as the planning application and subsequent Inquiry.”

A decision on whether to allow the appeal to allow the plans for 8,445sqm of employment space built on the outskirts of the village is set to be made by the Autumn. If the appeal was allowed, then a further planning application would need to be submitted for the details of the scheme.”

https://www.devonlive.com/news/devon-news/independent-inquiry-calls-after-claims-3158474

“Amazon CONFIRMS it is moving Exeter operations to 100,000 sqft facility close to Cranbrook”

https://www.midweekherald.co.uk/news/cranbrook-move-for-online-retailer-amazon-1-6181313

but not all good news:
https://www.theguardian.com/business/2018/may/31/amazon-accused-of-treating-uk-warehouse-staff-like-robots?CMP=Share_iOSApp_Other

Grant Thornton – EDDC’s auditors – get more flack

Owl says: Good job we have internal auditors and an Audit and Governance Committee and a Scrutiny Committee …

“What is most perturbing is that the auditor being relied upon by investors [in Sports Direct – whose shares have tumbled] to navigate their way through the accounting miasma is Grant Thornton. It is jolly good that Grant Thornton is a challenger to the big four, but investors might feel more comfortable if the track record were more stellar.

Among its stunning successes were the audit of Patisserie Valerie, where tens of millions of pounds vanished, and Neil Woodford’s gated Equity Income fund.

Small wonder Grant Thornton has been put under special measures to raise audit quality by the enforcer, the Financial Reporting Council. Given the known unknowns, the 9 per cent drop in Sports Direct looks too kind. …”

https://www.dailymail.co.uk/money/comment/article-7249985/ALEX-BRUMMER-Chaos-Mike-Ashleys-empire-transpires-no-master-plan-place.html