Council accounts disclaimed by auditors
Auditors have stated that they want to reject a council’s 2023–2024 financial statements.
Middlesbrough Council’s “precarious financial position” and capacity to deliver “affordable services” led Forvis Mazars to declare that it would disclaim its accounts.
Although the audit noted that the council had made “significant improvement” by implementing a new transformation plan and budget-setting approach, it further stated that “financial sustainability” still needed to be improved.
“Much better than we’ve been in for the last three or four years” is how Justin Weston, the council’s head of finance and investment, described the current state of affairs.
Auditors should issue a clean opinion on accounts, providing full assurance as to their content and accuracy, but they can also disclaim accounts if insufficient work has been done to formulate an opinion.
This can be because the auditor has been unable to get all the information needed or appropriate evidence to state whether the financial statements are properly put together.
High spend areas
The disclaim outcome is largely due to the fast approaching “backstop” deadline for auditing 2023-24 accounts, 28 February 2025.
Forvis Mazars has taken over the role of auditing Middlesbrough Council and its duty to be satisfied refers specifically to the 2023-24 financial year.
A spokesperson told the local authority’s audit committee: “What we’ve done in the draft report is log our audit judgements in respect of 2023-24, but also tried to reflect on the arrangements as they’ve developed during that year since.”
The finance staff collaborated with directors on “high spending service areas” to “develop more comprehensive and data driven demand and cost modelling,” a Middlesbrough Council spokesperson told the Local Democracy Reporting Service.
SEND transport, children’s social care, and adult social care were high-spend areas.
The Labour government attempted to address what it referred to as the “broken local audit system in England” by instituting the “backstop” deadline.
Only 1% of councils and other local bodies released audited accounts on time last year, according to Jim McMahon, minister of state for local government and English devolution.
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