Auditor shortage delays Reading Council accounts<\/p>\n<\/p>\n
According to Labour council leader Cllr Jason Block, Reading is one of 50 councils that have not yet produced signed-off accounts for the 2018\/19 financial year. In Reading\u2019s case, the delays have cost the council more than \u00a3600,000, Berkshire Live reported<\/a>.<\/p>\n The hold-ups go back to the 2016\/17 accounts, which were audited by EY and published\u00a0in July 2019 after a two-year delay. The auditors reportedly raised more than 1,638 queries on these accounts.<\/p>\n The 2017\/18 accounts, due by July 2018, were delayed by the previous year\u2019s late accounts and finance officials told councillors at a meeting on 25 February that competing pressures had prevented staff from working on the 2018\/19 accounts.<\/p>\n The latest annual report and accounts should be completed soon and be ready for a 30-day public inspection period by the end of its March financial year, the council said.<\/p>\n The Reading audit debacle has drawn criticism from Lib Dem opposition councillors and in previous years from local MP Alok Sharma<\/a>, who was promoted to Secretary of State for Business in the recent cabinet reshuffle. In that role, he is responsible for overseeing audit regulation, which is the subject of two separate government reviews.<\/p>\n Public sector audits were privatised in 2014, when the old Audit Commission was retired and a new local government-backed entity\u00a0Public Sector Audit Appointments Ltd (PSAA) was created. The PSAA is responsible for setting fees and appointing auditors to 98% of all relevant authorities and ensuring that their contracts are managed consistently and effectively.<\/p>\n Five years on, however, and the picture is looking bleak. In August last year, PSAA reported<\/a> that 210 out of 486 (40%) audit opinions on 2018\/19 accounts were not available by the target date of 31 July 2019, compared to 13% of opinions that were not available by the target date the previous year.<\/p>\n \u201cThe target date has been missed in some cases because of a shortage of appropriately skilled and experienced auditors,\u201d the PSAA reported to substantiate the Reading Council leader\u2019s claim. \u201cIn others, the standard and timeliness of draft accounts, and\/or associated working papers, has been lacking. Other delayed opinions arise from difficulties in obtaining responses to and resolving audit queries, and unresolved technical issues including matters arising within group accounts.\u201d<\/p>\n Audit skills shortages are being felt across the profession, but the situation appears to be building towards a crisis in the public sector. The recent Brydon review set out to revive the credibility and kudos of auditing by separating it from the accounting profession, but another review is underway into public sector audit<\/a>, led by former Chartered Institute of Public Finance and Accounting (CIPFA) president Sir Tony Redmond.<\/p>\n The deadline for comment was in December, so the sector will be looking to see if Sir Tony can find a solution to the underlying problems. He\u00a0was president of CIPFA around the time of the transition in public sector audit arrangements when the institute raised concerns about \u201csubstantial issues\u201d relating to the resourcing of local audit.<\/p>\nGrowing crisis<\/h3>\n
Market failure in audit<\/h3>\n