Reading Council accounts delayed again as costs mount

Reading Borough Council’s (RBC) beleaguered accounts have been published late for five years running at a cost of more than £1 million and a council report has revealed another three-month delay is expected.

Back in April, the council said the 2019/20 and 2020/21 accounts should be signed off by December 31, 2021.

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Three months later, this has now been pushed back by a further three months to the end of March 2022, an Audit & Governance committee report reveals.

Meanwhile, the council’s 2017/18 accounts, which were expected to be signed off in May, are still to be verified by EY.

The committee will discuss the latest situation on Monday, July 19.

What has gone wrong with the council’s accounts?

PICTURED: The council's offices

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.

But due to the historic failures to keep good accounting standards and controls, the 2016/17 were published two years late and this has also delayed the accounts for subsequent years.

The 2016/17 accounts were finally signed off in July 2019, while the 2017/18 accounts were signed off in October 2020, an even longer delay.

The 2018/19 accounts are currently being audited by EY. The council had expected these to be signed off in May but has now given no date for them to be approved.

The extra auditing work over five years has led to costs of more than £1 million above normal fees.

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RBC’s accounts have had to be qualified due to lingering issues in some areas, creating further delays.

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

Some of the more recent delays are partly due to the Covid-19 pandemic.

How much has solving the accounting failures cost the council?

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”.