Guildford Council Finance Management Has Significant Weaknesses

Auditors are unsure how the council tracks its money. A report found big flaws in Guildford Council’s finance management. This could impact their bank statements. Auditors check public groups’ finances yearly, ensuring proper handling of funds. Grant Thornton checked Guildford’s accounts for two years.

Paul Cuttle from Grant Thornton spoke to council members. He said they will likely get a disclaimer next year which will affect future audits. The council is unsure how much money they have, but changes could boost confidence. The council and staff will implement suggested changes.

Auditors may issue a disclaimer for 2022/23 and 2023/24. The meeting occurred on February 20. Grant Thornton lacks proof of accurate financial statements and cannot comment on the council’s accounts.

Cuttle said they do not know how to fix this, requiring government and stakeholder help. They might accept the accounts as correct; this could involve a “statutory override”.

The audit found five major issues that existed in the accounts for those two years. Financial planning had funding gaps, internal controls were weak and hurt services, and processing final accounts had issues. Housing service improvements failed and contractor management had losses.

The council’s last complete finance check was in 2020/21, which weakened their position. The unaudited accounts covered two years. A fraud investigation occurred, resulting in an £8.7 million overspend which reserves had to balance.

Council members knew about these issues and cited the council’s improvement plan. They were confident Guildford was working through them, including finance team control and policy review. They planned also to review budgets.

Councillor George Potter felt audits were “hindsight,” noting problems from the council’s report after the fraud. Cuttle clarified the audit statements are retrospective. Previous audits showed issues with finances where documentation and reserves also caused problems.

The report cited challenges in auditing records for 2023/24 as auditors lacked required information and could not finish their work. Accounting records were poor, the finance team lacked capacity, and could not support the audit well. This weakness in the council’s finances needs fixing.

Chief Finance Officer Richard Bates spoke about the future and hoped for a better starting point for 2024/25 accounts, so the process should hopefully go smoother. Staff turnover in the finance team made the work hard.

The council noted the accounts and will send them to the council’s executive for approval.