Auditors to disclaim council’s 2023-24 accounts

Audit professionals have announced their plan to issue a disclaimer of opinion on a local authority’s financial statements for the fiscal year 2023-24. Forvis Mazars stated its decision to disclaim Middlesbrough Council’s financial records stems from the council’s “precarious financial position” and its capacity to deliver “affordable services”. While the report recognized the council’s “significant improvement” through the implementation of a revised budget-setting methodology and a transformation strategy, it also indicated that further efforts are required to enhance “financial sustainability”. Justin Weston, who serves as the council’s head of finance and investment, commented that the current financial standing is “much better than we’ve been in for the last three or four years”. Typically, auditors are expected to provide an unqualified opinion on financial statements, thereby offering complete assurance regarding their content and accuracy. However, they possess the authority to disclaim accounts if inadequate procedures have been performed to form an opinion. This situation may arise if the auditor has been unable to obtain all necessary information or sufficient appropriate evidence to determine whether the financial statements are accurately compiled. The decision to disclaim is primarily attributable to the imminent “backstop” deadline for completing the audit of 2023-24 accounts, which is 28 February 2025. Forvis Mazars assumed the responsibility for auditing Middlesbrough Council, and its obligation to be satisfied pertains specifically to the 2023-24 financial year. A representative informed the local authority’s audit committee: “What we’ve done in the draft report is log our audit judgements in respect of 2023-24, but also tried to reflect on the arrangements as they’ve developed during that year since.” A spokesperson for Middlesbrough Council informed the Local Democracy Reporting Service that the finance department collaborated with directors in “high spending service areas” to “develop more comprehensive and data driven demand and cost modelling”. These significant expenditure categories encompassed adult social care, children’s social care, and SEND transport. The “backstop” deadline was implemented by the Labour government as part of an initiative to rectify what it termed the “broken local audit system in England”. Jim McMahon, the minister of state for local government and English devolution, noted last year that only 1% of councils and other local entities managed to publish their audited accounts punctually. For updates, follow BBC Tees on X, Facebook, Nextdoor, and Instagram. Story ideas can be submitted to northeastandcumbria@bbc.co.uk. Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the content found on external websites. Information regarding our policy on external linking is available.