CCH oversee Hart Finance Fiasco

 

Hart Council finances are in disarray. First, the auditor has been unable to complete their work on time, because Hart, and its service provider Capita has not met the deadlines to produce accurate figures. Second, Hart’s accounts have had to be published without an audit opinion, with 8 material issues and 6 significant issues outstanding. Finally, Hart’s own Overview and scrutiny committee has condemned the accounts as “incomprehensible”.

The audit was supposed to be complete by the end of July and will not now be completed until September with no specific date yet set.  CCH cabinet member and deputy leader, James Radley, is responsible for finance, so he must carry the can for this fiasco.

EY unable to audit accounts on time

In their progress report, EY identified 8 material issues to be resolved.

The scale of these issues makes it difficult to believe the accuracy of the unaudited reported accounts.

Overview and Scrutiny on the case of Hart Finance Fiasco

The Overview and Scrutiny Committee picked up on this in July. O&S criticised Hart’s revenue accounts saying that:

• It was disappointed with the format,
• The accounts were incomprehensible and
• Without a clear and transparent auditable link from the appendix to the main report recommendations.

CCH cabinet member, James Radley in charge of Finance was quizzed about his role at the recent full Council meeting. Minutes can be found here.

Here is the header of the report:

It does seem rather odd that Capita are not obliged to produce auditable accounts by the required deadline.

Joint CEO’s: Nothing to report

Quite remarkably, at last week’s council meeting, the joint-CEO’s had nothing substantive to report. Yes, that’s right, the accounts are incomprehensible, unaudited, not auditable and will have to be published without an audit opinion and they have nothing to say.

Detail of Hart Finance Fiasco

We have looked at the detail of the reports examined by O&S. The main report suggests an underspend of £369K in the revenue accounts. But the supporting appendix shows an overspend of £713K, but miraculously, this changes to a surplus of £27K after adjustments. But this relies on the budget being adjusted to -£27K, with only £1 of actual expenditure. None of these figures can be reconciled to the reported £369K surplus.

 

The difference between the £713K deficit to the reported £369K surplus is more than £1m on an overall revenue budget of ~£6m. We struggle to see how our money is being effectively controlled.

This is clearly an embarrassment for service provider Capita. We also question the competence of CCH Deputy Leader James Radley who takes responsibility for Finance and the joint Chief Executives.

It remains to be seen how they sort out this mess. Apparently, Capita are presenting to Overview and Scrutiny on 20th August.

The O&S minutes can be found here.

The main report submitted to O&S can be found here and the Appendix can be found here.