Delays to the completion of Tees Valley Combined Authority’s accounts are continuing, with councillors warning that audit issues risk being “kicked into the long grass”. The authority’s audit processes for both the 2023/24 and 2024/25 financial years remain incomplete, despite months of work to resolve outstanding issues.
Speaking at a meeting of TVCA’s Audit and Governance Committee on June 30, interim finance director Jo Moore said the authority was “not in a position yet to draw a close on 23/24 and 24/25”. She told members she hoped matters could be concluded by the committee’s August meeting, adding that she was around two to three weeks away from being able to sign off the accounts from the authority’s side. However, further work would still need to be completed by auditors Ernst & Young (EY).
The delays mean the accounts for both 2023/24 and 2024/25 are expected to be formally disclaimed. A disclaimer means auditors have been unable to carry out enough work to provide full assurance on the accounts, although they are still required to assess whether value for money has been achieved.
Ms Moore explained that the closing balances for the delayed accounts would form the opening balances for the 2025/26 accounts. She also confirmed that draft accounts for all TVCA entities, including its development corporations, would be published by the statutory deadline of June 30.
During the meeting, Ms Moore said she was reluctant to prepare group accounts before EY was satisfied with the accuracy of the individual entity accounts, warning that errors in any one organisation could affect the wider group accounts.
Committee chair Cllr Mandy Porter expressed frustration at the process, suggesting that every time the authority appeared close to resolving issues, new concerns were raised by auditors.
She said responses from EY often came “late in the day”. However, EY representative Stephen Reid rejected that suggestion, stating that audit queries had been raised at the appropriate stage of the process.
Mr Reid said auditors had identified “a number of significant risks from a value for money perspective” and added that obtaining supporting documentation had been challenging due to record-keeping issues within the authority.
Conservative cllr Niall Innes said audit information appeared to be “kicked into the long grass” and questioned whether a more detailed review was needed. He told the meeting: “We don’t seem to be getting any further forward with this.”
Mr Reid later indicated that it was unlikely auditors would complete all their work in time for the August committee meeting.
Concerns were also raised about whether the authority could complete the process before Ms Moore leaves her interim role.
Conservative cllr Peter Grogan asked whether she would still be in post when the accounts were finally signed off. Ms Moore said she was committed to remaining until the end of September and agreed it would be in everyone’s interest to conclude matters before her departure.
Cllr Grogan suggested mid-September should be the target date to “draw a line” under both the authority’s work and EY’s audit process.
Ms Moore warned that if the accounts were not completed before a new finance officer took over, the incoming officer would need to be satisfied enough to sign accounts they had not been involved in preparing. She said: “Coming in new, and being asked to sign a set of accounts that you’ve not been involved with in any way, shape or form, is incredibly difficult.”
Cllr Grogan added that if the process was not completed before Ms Moore left, it could significantly delay progress because of the due diligence required from any new officer taking over responsibility.
