Grant Thornton’s issues have meant that Teignbridge District Council’s accounts will not be audited on time.

The council’s statement of accounts and financial records for the 2018/19 financial year were due to be audited by the external auditors Grant Thornton during June and July.

However, Cllr Alan Connett, portfolio holder for corporate resources, told Monday’s executive committee that the no date for when the audit would take place was yet known.

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He said: “We anticipated that the audit would be taking place in July but we have been told by them that they are unable to do so because of pressures at their end. We are organising when the audit will be done but Grant Thornton will be providing a letter of exoneration to us to make it clear it is down to their internal issues and so no-one thinks that the council is to blame.”

Teignbridge District Council Forde House (Image Daniel Clark)

Cllr Stephen Purser questioned whether the council would be penalised in any way or would be censured by the government if the accounts were not audited by the July 31 deadline.

In response, Cllr Connett said: “I was concerned about this but I am assured there is no penalty for us. Grant Thornton will provide a ‘letter of comfort’ that sets out their issues and what caused the issues and that the council are not at fault. We are where we are. They are the appointed auditors for us, but we will express our concern about this and hope the letter comes to us soon.”

Grant Thornton have recently faced heavy criticism of their audit practises bakery chain Patisserie Valerie last year admitted to a significant accounting fraud that its external auditors failed to spot, with Grant Thornton remaining under investigation by the UK accounting watchdog over its work for Patisserie Valerie.

 

The firm also received its largest fine of £3m from the accounting watchdog last August, and was ordered in January to pay a landmark £21m negligence claim in relation to its audit of Assetco, a business that once leased London its fire engines. Its audit of FTSE 250 government contractor Interserve is under scrutiny by the accounting regulator.

The firm at the start of June appointed a new head of audit – Fiona Baldwin – the second time in 12 months an appointment to that role had been made.

An independent review into its accounting operations to improve standards has since been announced by the firm.

Cllr Alan Connett

Cllr Alan Connett

The report to the meeting from Cllr Connett had shown that the council’s draft closing general reserves at March 31 were £2m, a £37,000 improvement on the target budget.

On the revenue budget, he said that car parking income was down £73,000 on the probable budget of £3.6m, but leisure income was £39,000 better that the probable budget of £2.3m and building control and development management income was £46,000 better than the probable budget of £2m.

 

Overall salary costs, including vacancy savings, were underspent by £36,000 on the probable budget on a total salary cost of £17.2m including employer’s national insurance and superannuation.

For 2018/19 sundry debt write offs were £111,000, Cllr Connett said, adding: “Although the debts are written off, we never forget a debtor.”

Martin Flitcroft, Chief Finance Officer, added: “The report notes an overall favourable revenue variation for 2018/19. Cash flow is forecast to be positive over the next twelve months apart from some possible minor temporary borrowing. Capital is funded over the three year plan period 2019/20 to 2021/22 with the use of prudential borrowing where necessary.”

The executive unanimously agreed to note draft revenue results.

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