What was the answer to my question to Cllr Steve Foulkes about openness at Merseytravel and the Liverpool City Region Combined Authority?
What was the answer to my question to Cllr Steve Foulkes about openness at Merseytravel and the Liverpool City Region Combined Authority?
Cllr Steve Foulkes (Lead Member for Finance and Organisational Development) front (right) answering a question at a public meeting of the Transport Committee (Liverpool City Region Combined Authority) 9th August 2018
Yesterday I asked a question to Cllr Foulkes (pictured above), who is the Lead Member for Finance and Organisational Development on the Liverpool City Region Combined Authority’s Transport Committee. You can also watch video of the question asked and Cllr Foulkes’ answer below.
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Why is Wirral Council’s draft 2015/16 statement of accounts to be amended following concerns by myself and their external auditor?
Why is Wirral Council’s draft 2015/16 statement of accounts to be amended following concerns by myself and their external auditor?
Tom Sault (Acting Section 151 Officer) Wirral Council at the Audit and Risk Management Committee on the 13th June 2016
I’d perhaps better start by declaring the interest that I’m the person the letter below is to, in response to a letter I wrote to Robin Baker.
In an update to Why am I objecting to Wirral Council’s draft statement of accounts for the 2015/16 financial year? published on the 11th July 2016, I have today received a further reply (that you can read below) from Wirral Council’s auditors Grant Thornton dated 19th July 2016 which I quote from below. I’ve linked to the legislation referred to and the page of the statement of accounts that’s the issue. It seems they agree with me (although curiously don’t address the issue of bonuses too in their letter). I’ve left out some of the bits of their headed notepaper which I summarise in brackets ().
Please note the below letter I quote from was written by Robin Baker of Grant Thornton UK LLP (not myself).
I note from your letter that you wish to raise an objection to the accounts of Wirral Metropolitan Borough Council. You identify that the draft accounts included on the Council”s website does not comply with the requirements contained within the Accounts and Audit Regulations 2015. Specifically for Category 1 authorities there is a requirements under Regulation 2(1)(a) that for employees who salary is more than £150,000 per year, that the name of the employee is included within the Senior employee remuneration table. You highlight the Council’s Chief Executive is on a salary in excess of £150,000 yet he is not named in the table at note 32 of the draft accounts. You ask us to let you know whether we will consider this objection.
As part of our audit process I have reviewed the draft financial statements prepared by the Council. My review also highlighted the omission of the name of the Chief Executive from note 32 to the draft financial statements and I asked my team to raise the matter with the Council. The Council has acknowledged that the failure to name the Chief Executive in the draft financial statements is an oversight that will be corrected in the revised financial statements that will be published before 30 September 2016.
Thank you for raising this matter with me. Given the Council acknowledges the failure to name the Chief Executive is an oversight and will be corrected, we do not consider there is a need to treat this matter as a formal objection to the accounts. The failure to comply with the regulations will be corrected and there will be no continuing breach that would require us to consider whether the accounts are contrary to law.
If you do not agree with this view, please let me know as soon as possible.
Yours sincerely,
(signature)
Robin Baker
Director
For Grant Thornton UK LLP
(bit at the bottom about how they’re Chartered Accounts, a LLP registered in England and Wales, registered office details, list of members available, regulated by the Financial Conduct Authority, member firm of Grant Thornton International (GTIL) etc)
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To
Councillor Anthony Carr (Chair) anthony.carr@councillors.sefton.gov.uk
Councillor Nina Killen (Deputy Chair) nina.killen@councillors.sefton.gov.uk
Councillor Andy Moorhead andy.moorhead@knowsley.gov.uk
Councillor Rob Polhill rob.polhill@halton.gov.uk
Councillor Mike Sullivan mikesullivan@wirral.gov.uk
Councillor Pam Thomas pamela.thomas@liverpool.gov.uk
Subject: Liverpool City Region Combined Authority Audit Committee meeting (3rd November 2015) item 6 LCRCA Final Accounts 2014/15
Dear all,
I have read the reports for tomorrow’s meeting and as you are the people on the Audit Committee there to represent the people of Merseyside I wish to make the following points to you.
If you wish me to explain at the public meeting itself why I made the objection I am happy to do so, but as you will understand in this email what I stated in the objection is the tip of a larger iceberg.
Firstly, the same error was also made in the Merseytravel accounts (I think since Merseytravel’s Audit and Governance Sub-Committee was disbanded you are also responsible for Merseytravel’s accounts too). I know someone else made an objection to the Merseytravel accounts (I didn’t), but had I made the same objection to the Merseytravel accounts too as this would’ve added an extra ~£5k to your audit costs.
As it’s never been made clear to me if the same error in Merseytravel’s accounts was also corrected, I would appreciate an answer to that point.
There are other points about the accounts that I did not raise in my objection, that you as the Audit Committee should be made aware of.
The accounts for 2014/15 and accompanying reports refer to the Accounts and Audit Regulations 2015. However the Accounts and Audit Regulations 2015 only apply to financial years from 2015/16 onwards, therefore this is another error.
Finally, I am concerned that the system of internal controls at the LCRCA, the external auditor or the councillors approving the accounts did not spot this or the matters relating to my objection.
I hope at the meeting tomorrow you will exercise some scrutiny as to what happened and why and put into place controls to prevent it happening in the future.
Yours sincerely,
John Brace
P.S. I will clarify what it stated on page 11 of the auditor’s report.
The accounts in their original form didn’t comply with legal requirements. It’s been acknowledged by the auditors and officers they were wrong. The point about the external auditors applying to the court for a declaration that the accounts are unlawful is therefore moot as they’ve been changed.
However it is important that councillors consider the reasons behind the objection in a public interest report, otherwise the people tasked with corporate governance will be in the dark as to what was wrong, why it had to be changed and be aware to check for this next year. I hope I have made this clear.
P.P.S On another audit related note, as the LCRCA now has a website, the Local Government (Transparency Requirements) (England) Regulations 2015 make it a legal requirement that certain information is published on its website (such as payments over £500 for example the payment to the auditors).
Currently this is being done on Merseytravel’s website, which makes it very hard to find the LCRCA payments amongst the Merseytravel ones. I would like the Audit Committee to please find out why this information isn’t published on the LCRCA website as it would aid with better openness and transparency about what the LCRCA is doing.
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