HDC's 2010-11 Account still not approved?

I was looking to see whether HDC has finally approved the Accounts for 2010/11 which were supposed to be approved by 30th September 2011. According to the Councils own website these accounts have yet to be approved. This is just plain wrong.


HDC believes its residents should obey the law and will try and send us to prison over non payment of Council Tax. Yet HDC is very relaxed when HDC breaks the law.

HDC Accounts not now ready until the New Year!

The Corporate Governance Panel seems to have given up on agreeing the annual accounts which were due on 30th September 2011. In a recent report the CGP says:

The Panel was informed of efforts made by the Head of Financial Services’ staff and the Council’s external auditors to complete the process for finalising and publishing the Council’s accounts for 2010/11. Members are hopeful that the work will be finalised early in the New Year.


No date or extra meeting arranged.


In a previous blog I set out an explanation sent to me by Steve Couper of HDC. In it he said:

.... and the current intention is to submit them to the next programmed meeting of the Panel on the 7 December.


Even this date has been missed.


What has been dropped is any target date. Just "early in the New Year". Whatever that really means.

The law is very clear:

(3) Subject to paragraph (4), a larger relevant body must, no later than 30th September in the year immediately following the end of the year to which the statement relates—

(a)consider either by way of a committee or by the members meeting as a whole the statement of accounts;

(b)following that consideration, approve the statement of accounts by a resolution of that committee or meeting;

(c)following approval, ensure that the statement of accounts is signed and dated by the person presiding at the committee or meeting at which that approval was given; and

(d)publish (which must include publication on the body’s website), the statement of accounts together with any certificate, opinion, or report issued, given or made by the auditor under section 9 (general report) of the 1998 Act.

(4) The responsible financial officer must re-certify the presentation of the statement of accounts before the relevant body approves it.

To me this is straight forward. The Corporate Governance Panel cannot delegate these powers away to Council Officers. Yet that is what it seems to have done. HDC does like Breaking the Law. 

HDC still racing to get its accounts approved

The accounts must be approved by 30th September of each year. This year HDC has missed the deadline and has done so by a wide margin. The accounts and annexes are down as "To Follow".



In the report from the Auditors to the Council the following is said about the delay:

We therefore propose to include a report be exception following our vfm conclusion for 2010/11 to confirm that we have identified significant weaknesses in the Council’s arrangements for ensuring reliable and timely financial reporting that meets the needs of internal users, stakeholders and local people, as a result of the delay.

The report goes into detail:

However, the authority was not able to provide us with a comprehensive set of supporting working papers at the start of our audit. There are a number of reasons for this including:

• The Council’s capital accountant was absent on the grounds of ill health, and other finance staff had difficulty interpreting and understanding elements of capital accounting and capital financing information. 
• The Council underestimated the level of resource required to do the IFRS restatements and produce the 2010/11 financial statements and the restated 2009/10 and 2008/09 information. 
• As new auditors it was always expected that we would not have the same degree of knowledge of the specific circumstances of the Council as an incumbent, however, the Council underestimated the number of questions and supporting information that we would require to support the accounts. 

This has had a knock on effect of our audit, resulting in working papers that did not agree to the accounts and significant gaps in the information provided to us, predominately in relation to capital accounting.
During the audit the finance team has on occasion, struggled to provide sufficient relevant and reliable information to us in respect of the Council’s leases, capital accounting and other elements of the accounts.

Yet the Capital accountant was one of those being made redundant!

The report still goes on:

As of 28 November 2011 we are still waiting on information from the Council to enable us to complete our audit. We will provide a full verbal update to the Panel when we meet with you on 7 December 2011.

An interesting bit:

Leisure Centres

Our review of leases identified that the five leisure centres included on the Council’s balance sheet are held under management agreements. These agreements indicate that the assets are jointly controlled assets between the Council and Cambridgeshire County Council. The Council has prepared an assessment of the proportion of the assets attributable to the County Council based on capital investment in the assets since they were built. At the date of writing this report management were still in the process of making the necessary adjustments to the financial statements.

Initial calculations expect this to impact the cost of the assets on the balance sheet by decreasing their value by approximately £1.5 million - £2 million (£19.8 million total assets).

From the Auditors report I can surmise HDC were unprepared for the new IFRS accounting standards. Even though the Capital Accountant was ill and was subsequently made redundant this was a problem that HDC management should have managed. If there are not the right people to do the job then find someone who can. It is not as though the auditors just turned up unexpectedly. In the report the auditors state:

Following discussions with management following our appointment as external auditors we performed early audit work in February and March 2011 on the restatement of the prior year comparative information. At that time the evidence available to support the Council’s work to date on the IFRS conversion was not sufficient to enable us to carry out detailed audit procedures. We provided an assessment focussing on the key areas of the conversion and discussed this with Management in April 2011 who continued to work on the transition process.

So the Council's Management knew back in April 2011 there was trouble, though had an idea in February/March 2011. Yet as far as I can see the Management did little to resolve this situation so the accounts could be presented by the deadline of 30th September 2011.

HDC is breaking the law

In the Corporate Governance Panel Agenda the following is stated:

The reasons why the final accounts are not ready is not stated. Only a "combination of reasons" rather than actually spelling these out. As pointed out it is a requirement the accounts are approved by the panel. What do the Financial Regulations say?

The Corporate Governance Panel isn't doing this. Yet the law says HDC should do so. HDC is therefore breaking the law by not agreeing the Final Accounts.

What are the problems? HDC hasn't said. They could be minor or major. That will have to wait for the final accounts when they are finally published.

It seems OK for HDC to break the law over the approving these accounts. Yet HDC doesn't want residents to break the law. Council Tax defaulters, dog litter, parking fines and many other offences HDC uses the law to fine and even imprison offenders. Yet when HDC breaks the law - nothing is done. Nothing is mentioned in the Agenda to indicate these accounts have to be approved by 30th September 2011. As an Authority HDC has a duty to uphold the law. If HDC doesn't then why should the residents?