An independent audit opinion on legacy authority finances cannot be given due to an under-resourced and over-worked finance team, Cumberland Council heard.
At a meeting of the council’s Audit Committee on November 12, independent auditors Grant Thornton said they had ‘not been able to obtain sufficient appropriate audit evidence’ by a stated backstop date to conclude that the financial statements for the Carlisle City and Allerdale Borough councils are ‘free from material misstatement’.
This is part of an ongoing and sluggish signing off of several financial statements for the three previous authorities prior to local government reorganisation (LGR) in 2023 – Carlisle City, Allerdale Borough, and Copeland Borough councils.
This week’s meeting contained financial reports for Carlisle and Allerdale councils for the 2022-23 financial year.
Challenges posed by Cumbria’s LGR introduced complexities that made completing the final audits for Carlisle and Allerdale councils unusually difficult, a report from Grant Thornton said.
A primary issue was the transfer of financial records and assets from Carlisle and Allerdale into the new Cumberland Council framework.
This consolidation required aligning assets, liabilities, and reserves from multiple organisations, which presented compatibility challenges.
Carlisle’s and Allerdale’s records were previously maintained with distinct financial systems, data formats, and policies, and integrating these into a unified structure required extensive reconciliation.
This process delayed the ability of auditors to confirm certain assets, liabilities, and year-end financial positions, as well as to review significant transactions.
Resource limitations were another contributing factor.
Staff from both councils were heavily engaged in the transition, allocating significant time to the reorganization itself rather than preparing documentation for the audit.
This reduced availability led to delays in auditor inquiries and limited the ability of both councils to assist the audit team with data validation and financial reviews.
As a result, some crucial financial data required for a full audit could not be verified, leaving certain items unconfirmed and preventing auditors from issuing complete reports.
Further complicating the audit were the technical inconsistencies across the councils’ legacy systems, which Grant Thornton cited as a significant barrier.
These inconsistencies not only affected data compatibility but also introduced the risk of information gaps and data discrepancies.
Ensuring data integrity while adapting the records to Cumberland Council’s new structure proved challenging within the audit timeframe, which contributed to the lack of a comprehensive conclusion for both councils.
The report recommended that Cumberland Council establish stronger data management and internal controls to prevent similar issues in the future and that they implement a unified approach to financial reporting, which would help streamline future audits and improve oversight.
Cllr John Mallinson (Houghton and Irthington, Conservative) said the initial timeframe ‘seemed reasonable’ and questioned why sufficient evidence wasn’t submitted on time.
Claire Liddle, chief legal officer, added that committee members ‘will be aware we’ve had this conversation’ before, and it was discussed that the finance team was and is under-resourced as several accounts had to be closed over the summer.
Barry Lennox, senior manager of the council’s finance team, said it’s ‘no secret’ that there were resourcing problems, citing nine vacancies on the team.
This is increasing on the team’s workload, so much so that day-to-day tasks are falling under, not just the additional backlog of legacy accounts.
Cllr David Moore (Gosforth, Conservative), who was chairing the committee meeting, said there are several other councils nationwide encountering a similar resourcing problem, even those who haven’t gone through LGR – “It’s not just a Cumberland problem… it’s a national issue in recruitment.”
These vacancies are long-standing, but Cllr Moore said the council will be in a better resourcing capacity once the backlog of legacy accounts have been cleared.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel