Investigation into whistle-blowing allegations holds up signing off accounts from Northumberland County Council

Northumberland County Council has had to delay the final sign-off of its accounts while external auditors investigate whistle-blowing allegations.

Thursday, 25th July 2019, 4:45 pm
Updated Tuesday, 13th August 2019, 1:09 pm
Northumberland County Council

The audit committee was due to approve the local authority’s statement of accounts for 2018-19 at its meeting on July 24, ahead of the publishing deadline of the end of July.

However, this has not been possible as the external auditors Ernst and Young (EY) have not completed their report as they need to investigate a number of allegations which ‘relate to senior management and others that have significant roles in internal control’.

The council has said it will cooperate fully, but there is frustration that bosses were only notified of these matters on June 25, despite the auditors having received the correspondence back in March.

And a senior councillor said he believed the allegations to be ‘scurrilous and politically motivated’.

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Stephen Reid’s report to the committee explained: ‘On June 25, we notified management that we had received correspondence which we considered obliged to investigate under EY’s whistle-blowing procedures, as the allegations relate to senior management and others that have significant roles in internal control.

‘Additionally, there may be more than an inconsequential impact both on the financial statements and/or our value for money opinions.’

Coun Nick Oliver, the cabinet member for corporate services, said: “We as an administration were a bit dismayed that it took from March to June to be notified about these allegations. I’m aware of the broad nature, but not the details of the allegations.

“Stephen explained that he needed more information from the whistle-blower and we accept that, but at which point do these complaints become scurrilous because broadly they seem to be things which have all been dealt with before.

“Hopefully we will get this dealt with quickly and the administration will be working closely with EY to bring it to a close as quickly as possible.”

Coun Oliver also said it was a ‘waste of public money’, adding: “It’s a shame we have to keep re-trotting the same things over and over again.”

However, Coun Ian Swithenbank said: “It’s wrong for members to seek information and it’s wrong to use terms such as scurrilous and politically motivated, we should not be asking any questions but waiting until the process is completed.

“I have no idea what it’s about, but I think it’s important in any case like this that due form is followed.”

His Labour colleague, Coun Lynne Grimshaw, agreed, adding: “I thought we were here to protect whistle-blowers.”

Coun Oliver responded: “The claims should be investigated, but they have been investigated in the past and now another mechanism has been used; they have been reported to the external auditor and he needs to investigate them.”

It is hoped that everything can be resolved in time for the accounts to be approved by the audit committee’s next meeting on September 25 at the latest.

A spokeswoman for Northumberland County Council said: “The council is extremely disappointed that its external auditor, Ernst and Young, did not notify us of these whistle-blowing allegations until June 25, when they had in fact received them on March 17. This has given us insufficient time to respond to these allegations, which will be investigated fully.

“The council is committed to working with Ernst and Young on this and we will continue to cooperate fully with them to ensure this can concluded as quickly as possible.

“Subject to the conclusion of this investigation, the council expects the statement of accounts to be approved. At this time, Ernst and Young have confirmed that there is no reason why these would not be approved by its audit committee in the very near future.”