More Costly Audit Questions ‘Inevitable’

Director of Finance, Peter Lawrence-Roberts

Director of Finance, Peter Lawrence-Roberts

More costly investigation into the Council’s books is, “almost inevitable” according to the authority’s finance chief.

Director of Finance, Peter Lawrence-Roberts, has told councillors that it is “highly likely” that more “armchair auditors” will question the Town Hall’s annual accounts.

Peter says the queries may not be on the same subjects. Recently locals have questioned the sale of Home Hardware’s Porthmellon store to the Council and chief officer’s remuneration.

Last year, the two queries cost the Council £49,000 in fees.

Peter told members that the bill had been queried but the costs were high because of the level of person who got involved in complaints.

The Audit Commission has been axed and accountants Grant Thornton will go through the Council’s books next time. Their fee will be £9,700 cheaper.

Cllr Richard McCarthy suggested that the auditor had felt guilty over last year’s charges, but Policy and Resources chair, Amanda Martin, warned him about getting personal.

Richard was told national rates have fallen.

Once a year, islanders are allowed to request and view any invoice, receipts and documents and if they question any amounts or paperwork, a third-party assessor can be asked to investigate.

2 Responses to More Costly Audit Questions ‘Inevitable’

  1. Jonny Exile March 4, 2013 at 9:25 am

    To put the Audit Commission’s charges in perspective, the entire 2011/12 external audit of the Council cost £53,000 and the cost of investigating the two complaints was £49,000.

    The only explanation I’ve seen is that it was so expensive because a high level of expertise was required (no further detail being given). No reference has been made to having to take Counsel’s opinion, for example, which would increase the costs.

    I guess that the Audit Commission’s basis for charging is basically an hourly rate multiplied by the time spent. Going on from that I haven’t been able to establish what their hourly rates are but, if I take a typical rate for the most senior staff in an accountancy firm like Grant Thornton who will be taking over the Council next year, I’m looking at circa £350 per hour. On that basis, £49,000 amounts to 140 hours being spent i.e. someone who charges more per hour than many, if not most, people on Scilly earn in a week spent about 4 weeks working on the complaints.

    Turning to the work required I would have thought it should basically involve a relatively straightforward review of the Council’s actions against documented procedure and best practice. Obviously it’s a job that requires a degree of skill but should it cost £49,000? At this stage I can’t see that being either justifiable or reasonable.

  2. Bill Hiner March 2, 2013 at 11:48 am

    Is it me, or does the comment “Armchair auditors” seem a little disparaging?