Nottingham City Council says it will not publish an auditors report that details serious concerns with its financial controls of taxpayers’ money.
The review, carried out by accounting firm Ernst and Young (EY) Global Limited concluded controls on how money is managed at the authority are “not fit for purpose”.
Nottingham City Council refuses to publish auditors’ report detailing financial concerns
So far the authority has only published its own summary of the feedback, named the ‘Financial Controls Assessment’ and said the original EY report cannot be made public.
The report, which was originally due to be complete by February, checked historical accounting practices to check for any potential manipulation of accounts.
“The Audit Committee report goes into significant detail about the assessment the council commissioned from EY of financial controls, and is explicit and transparent about the serious concerns identified and the actions being taken to address them”, a city council spokesperson said.
They added: “We are not able to provide any more information on the assessment as this may impact on further activity that still needs to be undertaken.”
Opposition view
But the Nottingham Independents and Independent Group said while the council’s document provides a “useful summary”, the full report should be made available to the Audit Committee “at the earliest opportunity”.
They added: “In the wake of the financial mismanagement of the City’s finances by Nottingham Labour, this is essential so that partners and more importantly council taxpayers have the confidence that the Council has finally moved on from Nottingham Labour’s past failings.”
Misspending history
It follows the uncovering in 2021 of huge misspending in the council’s Housing Revenue Account, involving the wrongful use of the funds from council tenants’ rent, and estimated to cost up to £51 million.
The report reveals concerns over ineffective systems including the inability to find documents and a culture which is “not focused on compliance” – but no fraudulent transactions have been found.
City Council Response
Nottingham City Council said it has “responded quickly” and commissioned an initial three-month remediation plan to address the control weaknesses.
A 12-week remediation project has been commissioned which will include weekly review meetings to ensure improvements are made quickly.
Councillors will discuss the report at the Audit Committee on Friday, June 30.
‘Very serious concerns’
EY examined six ring-fenced areas: the dedicated Schools Grant, the Better Care Fund, licensing income, parking, traffic regulation and bus lane enforcement income, the Transforming Cities Grant and Selective Licensing.
EY has rated the overall risk as ‘high’ in the six areas examined but they stated that there is “no suggestion of any fraudulent transactions”.
But they concluded that for the period 2019 to 2022, there are a number of “very serious concerns identified”.
“EY observed a weak control environment, ineffective systems, associated management information and a culture which is not focused upon compliance”, the report stated.
It added: “The findings of the financial controls assessment underpin a conclusion that NCC is operating with a considerably weakened control environment which is not fit for purpose in allowing a Local Authority to enact effective financial stewardship.”
But they acknowledged that the scale of change required with the city council’s finances “will take a number of years to fully implement”.
Ross Brown, Corporate Director Finance & Resources, said the authority is “committed to reviewing all our financial processes as part of our wider improvement journey”.
• Musters Road at Rectory Road West Bridgford part-closed on Saturday 1 July
• Keyworth Show goes back to the Middle Ages
• Riverside Festival 2023: Full details announced for this year’s Victoria Embankment event
• Nottingham Carnival 2023 on Victoria Embankment – date confirmed
He added: “We have already taken action to address the findings of the assessment but further work is needed. An initial three-month strategy is already in place which will work alongside our wider Financial Improvement Plan.”
