Long awaited report on Lewes District Council’s finances close to sign-off

On Monday (September 27), Lewes District Council’s audit and standards committee received the authority’s external audit report for 2018/19, marking the final steps before the authority can sign off its much-delayed and long overdue final accounts.

The report, from external auditors Deloitte, said the council should expect both an unmodified audit opinion and an all clear from value for money risks, as long as a few remaining adjustments are made.

Deputy chief finance officer Ola Owolabi said these remaining adjustments were not considered likely to affect the final opinion and said the final accounts could be signed off within the next few weeks. 

Once those accounts were signed off, external audit work could begin on the also overdue 2019/20 accounts, he said.

The committee agreed to delegate authority for this sign off, as long as there was no material change as a result of these final adjustments. 

In its report Deloitte made a number of recommendations to how the council can improve and futureproof its financial arrangements.

These included a ‘high priority’ recommendation that the council ensure it has full access to all its bank accounts, even if they are tied to sites or services run by third parties. This recommendation came after Deloitte found the council did not have access to a bank account for the Newhaven Enterprise Centre site.

Mr Owolabi said the council had already taken action on this and the other recommendations.

Another recommendation from Deloitte was for the council to improve its draft financial reporting. The recommendation is significant as Deloitte has long attributed the overall audit delays to problems with these initial draft financial statements. 

The council, for its part, had attributed the delays to a lack of resources and availability on Deloitte’s end.

While Deloitte had raised criticisms about these statements before, the final audit report was more explicit in its criticism, saying they had included  “internal inconsistencies … and presentational issues” which revealed “significant deficiencies in the financial reporting and close process.”

The full recommendation laid out a number of measures the council could use to improve this process. 

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While the 2018/19 audit process is now on the home stretch, it was clear the saga has left a bitter taste in the mouths of many councillors. 

This matter saw greater discussion later in the meeting as the committee weighed its options for future audits. 

As it stands, the council has until March 11 to decide whether it should opt back into the Public Sector Audit Appointments (PSAA) system, through which fees are set and auditors are appointed to local authorities.

It was through this system that Deloitte was appointed as the council’s external auditor. 

Mr Owolabi said the council had three options available: sign back up with PSAA; go it alone and appoint its own external auditor; or form a partnership with another local authority or group of local authorities to hire external auditors.

He went on to recommend that the committee should go over the options in more detail at a future date before making a recommendation to full council.