Failures in accounting have cost Reading Borough Council (RBC) more than £1 million, the council has confirmed.

The latest situation with the council’s accounts has been revealed in an Audit & Governance committee report ahead of next Thursday’s (January 28) meeting.

The council’s accounts have been signed off late for four years in a row due to historic failures to meet good accounting standards.

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What is the latest situation?

RBC’s 2017/18 accounts were signed off at the end of October 2020 and the council has now confirmed the final fee for auditing these accounts was £420,000 above the normal amount.

Added to the £600,000 extra accounting firm Ernst & Young (EY) charged to audit RBC’s 2016/17 accounts, the first that could not be signed off on time – this means the fiasco has already cost the council £1.02 million.

The 2018/19 and 2019/20 accounts are still to be audited ad the council has confirmed the 2018/19 accounts will also be above the normal fee but said EY “is not in a position to estimate an amount at this point”.

What went wrong?

Accounts are a summary of an organisation’s financial activity over a 12-month period.

They should be accurate and transparent financial information which gives a true and fair view of the council’s economic performance and financial stability.

They are audited to make sure they meet this criteria and accounts should be published in September each year.

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But due to historic accounting failures, the council’s 2016/17 could not be signed off in September 2017 and it took two years to resolve the issues.

This then delayed the accounts for the following years, while both the 2016/17 and 2017/18 accounts have had to be qualified due to lingering issues in some areas.

A qualified opinion means the auditor is unable to give an unqualified, or clean, audit opinion but can sign off the accounts.

What about the council’s accounts after 2017/18?

The draft 2018/19 accounts have been handed over to EY and auditing is “anticipated” to be completed by the end of March 2021.

Meanwhile, the draft 2019/20 accounts are set to be published in April 2021 ahead of being audited.

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Preparation for the 2020/21 Accounts will start in February.