IT and staffing issues cause East Devon accounts delay

Problems with an IT system and staffing issues have led to East Devon District Council missing an internal deadline for submitting its analysis of its spending.

The local authority had hoped to send its accounts for the 2023/24 financial year to its auditors, Grant Thornton, by the end of June, but is now aiming for early August.
Simon Davey, director of finance, told its audit and governance committee that a key issue had been entering data into an IT system it uses to keep track of the value of its council houses.
He said the valuations of around 4,200 properties needed to be updated, but that the technology had impeded the process.
“The system doesn’t allow us to do it en-masse, so we have got someone at the last minute to move 750 properties into different beacons (or valuation bands),” he said.
“It has therefore taken us extra weeks to complete the accounts that we weren’t expecting.”
He added that there had also been staffing issues.
“It is a very technical area and very specialised, and local authorities, especially district councils, struggle to find those staff,” he said.
“We have also had all our eggs in one basket, and so we have changed that to make sure we have at least two people involved in the process.”
Mr Davey said this delay had not delayed the overall audit process, as this was not due to begin until October.
The delay comes amid an ongoing nationwide issue with council audits being significantly overdue, mainly because of a problem with resources in both local authorities and audit firms.
Peter Barber, a key audit partner for Grant Thornton, said no opinion had been given on the 2021/22 or 2022/23 accounts because it had not been able to complete its work.
“East Devon is not alone in that position,” he said. “There is recognition in the sector that large numbers of councils have multiple years of audits outstanding, which reflects the complexity of council audits,” he said.
Mr Barber said he had been auditing local authority accounts for 30 years and that the job now was “fundamentally different” to even 10 years ago.
The previous government had proposed a so-called backstop, which would have allowed overdue accounts not to be formally audited after a certain date. It’s unclear yet whether the new Labour government will implement this.
If it is waved through, it would mean councils would still publish accounts for the outstanding years, but they would not be signed off as a ‘true and fair’ reflection by auditors, as the work hadn’t been completed.
Mr Barber said because audits of previous years were not finished, it would undertake a deeper audit of the council’s finances in its 2023/24 accounts.
This will mean that Grant Thornton will scrutinise any transaction from £1.5 million in size upwards. In previous years this has been £1.8 million, suggesting a less intense audit.