Herts County Council makes £21 million accounting error
PUBLISHED: 15:59 01 October 2010
A MISTAKE in the county council’s accounting led to its bank balance being overstated by some £21 million.
The Audit Commission highlighted the error along with a string of other criticisms of County Hall’s accounting system in an interim report presented at the council’s audit committee meeting last week.
Herts County Council (HCC) – which has been pulled up over accounting mistakes for the past three years – spotted the £21 million error before auditors started work in June and promised a swift explanation.
But after HCC failed to identify the error for several months, the auditor found the source of the problem and council officers were asked to revise and resubmit the correct accounts by the deadline last month, which they missed.
This left the auditor unable to give a full opinion on the accounts on time, but the council has been granted a one-month extension.
In the interim report, the auditor also pointed out a list of problems with the council’s accountancy system including incomplete and inadequate working papers, as well as delayed or unanswered audit queries.
A high staff turnover in the accounts department and the large number of temporary workers were blamed for the difficulties by the auditor because some were unaware of how the system worked or how the accounts were compiled.
HCC have attributed the £21 million mistake to a “presentational error” whereby a figure was placed in the wrong area of the balance sheet.
While a spokesperson insisted that there were no financial consequences, political opponents have been quick to slam the Tory-run council.
St Albans county councillor Allan Siao Ming Witherick, a Lib Dem member of the Audit Committee, said: “For members of the public it is horrifying. They pay their council tax in good faith. They trust the administration to look after it. But this is no longer happening at County Hall.”
Lib Dem spokesperson for audit, Cllr Paul Goggins, said: “This is a shambles. One would expect this kind of mess from poorly run councils – this council is supposed to be a well run council.”
HCC is now working to publish its final accounts by the end of October at which point the Audit Commission will decide whether to pursue any formal proceedings against the council in light of the consecutive problems over the past three years.
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