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News and Comment October 2021

Index: 2019202020212022

2 October (Part 1) - E&Y eyes up Bexley. Are its finances back on course?

On the very last day that a Council could legally publish its 2020/21 accounts, Elizabeth Jackson, an Associate Partner at Ernst & Young addressed Bexley’s General Purposes and Audit Committee. Unfortunately she only had the draft available because staff cuts and an antiquated finance system had delayed the Council’s input. (There are apparently no sanctions against late publication.)

There was still “a long list, and it looks quite scary, of work still outstanding”.

The delay beyond the statutory cut off date was not mentioned and given that a quarter of a million pound auditing fee will soon be winging its way to Watling Street you can understand the need not to be too critical of the paymasters. Last year the Auditor publicly announced the damning prediction that Bexley Council was about to run out of money which would not have gone down well.

As such among the first words uttered were that the accounts were “a good news story, an improvement on the previous year and everything was within the expected range”. (Short of Croydon levels of incompetence everything has to be an improvement on last year.)

Referring back to the 2019/20 report “prepared by our predecessor” (accompanied by a slip of the tongue when E&Y was referred to as Grant Thornton), 2020/21 was said to be “far more stable and [the accounts] are as robust as your Officers have indicated they are”. (Note: Checking back to both the 2018/19 and 2019/20 accounts shows them signed off by Ernst & Young so I do not understand the significance if that comment.)

“No concerns” were expressed about BexleyCo despite it proving to be an occasionally incompetent money pit up until now.

An accounting error of £0·39 million had been discovered but was judged to be unimportant and not corrected. No fraud had been detected. The definition of fraud was not hands in the till but manipulating the financial statements to make them appear better than they are.

Questions followed.

Audit Committee meetingCabinet Member for something unstated on the Council’s website [Growth], Cafer Munur, immediately pulled his usual stunt of profusely thanking everyone on the Finance Department’s payroll for doing their job. The turn around has been “fantastic and no small feat” which may be an acknowledgment of just how dire things were 18 months ago.

Pursuing the same theme “it is testament to how fantastic the Officers are here in Bexley”, the very same Officers who steered the ship on to the rocks and who provoke so much adverse comment from staff that lands in my email Inbox.

In a serious lapse of memory Councillor Munur referred back to Grant Thornton “who always praised [us] on our track record. Our track record is strong.” And more thanks followed. One or two of his colleagues were visibly cringing.

Just when everyone thought he had finished back he came again. “Thank you Officers for what you have done and across the board, not just Mr. Thorogood and his team but every Directorate.”

Eventually the question came, quite a good one as it happened. He wanted to now why the promised independent financial review following the Government offer of a bail out was still not available. The answer boiled down to some administrative cock-up between the Government Department (MHCLG) and the Council which may be resolved by the end of October but on the other hand it may not be.

Councillor June Slaughter changed Cafer’s tack slightly by thanking the Auditor, Ms. Jackson, for “her encouraging comments”. She questioned the Finance Director on why the Auditor had to report that “there had been delays in receiving some key working papers and supporting evidence” which had led to the Audit being behind schedule. Mr. Thorogood said he had “struggled to get information from the system” which is 26 years old but now replaced. The Council has just employed an Accountant which it had not done for the past five years so there should be no repetition of the current failures.

The next question came from the Labour Leader and maybe that is an excuse to draw a line across Part 1 of what looks like becoming an overly long report. More to come.

 

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