Row over firm 'downing tools' during council audit

Wokingham Borough Council has been issued with a 'disclaimed opinion' for two years' worth of audit reports

A multinational consultancy firm has been accused of "downing tools" and not finishing the job a council paid for in a row over external audits.

Accountancy giant EY was responsible for examining Wokingham Borough Council's finances but, after long delays, it announced it would leave two years' worth of audit reports incomplete.

The firm, formerly known as Ernst & Young, said it had hoped to complete the audits before Christmas but had not received sufficient information on how council-owned properties were valued - something the council disagreed with.

EY will issue a "disclaimed opinion" for both years, meaning it cannot say if it believes the council’s financial management is sound.

By law, every local authority has to have its finances audited by an external accountancy firm, but delays beginning during the pandemic have caused a huge national backlog, leaving years' worth of audits still to be completed.

Councillors have reacted angrily to EY's announcement that it will not try to complete WBC's audits for the 2021-22 and 2022-23 financial years.

One councillor, Mike Smith, accused the firm of "downing tools and walking away" from the job.

"Clearly something is catastrophically wrong," he said.

'Delays'

At a meeting in February, Mike Drake, an accountant appointed to the council's audit committee, said he was "absolutely astonished", while another member, Sandeep Vig, said it was "absolutely shocking".

Councillor Stephen Newton pointed out the government had recently given firms extra time to complete delayed audits, and asked EY to reconsider.

But Janet Dawson, a partner at EY, said the firm had already allocated its staff to other jobs and could not move them back.

She also said the council had not provided sufficient information, but that EY would not be able to complete the audits anyway due to more delays at the Royal Borough of Windsor and Maidenhead, which manages the pension fund for several local authorities in Berkshire.

Wokingham Borough Council said it did not yet know how much it would have to pay for the incomplete audits.

The authority also said it was waiting for the government to decide what a disclaimed audit would mean for councils.

In a statement, EY said: "We do not comment on the organisations we audit. Our priority continues to be the delivery of high-quality audits."