Improvements to fix serious financial concerns at City Council proving difficult to put in place

Nottingham City Council's Loxley House HQ
Nottingham City Council's Loxley House HQ
By Joe Locker, Local Democracy Reporter

Improvements to fix “very serious concerns” over how Nottingham City Council controls its money are proving difficult to put in place, according to the authority.

Accounting firm Ernst and Young (EY) reviewed the authority’s finances and in June a secret report concluded it had “very serious concerns” over how money is controlled.

It was asked to review the council’s accounts following the uncovering of significant misspending in the council’s Housing Revenue Account in 2021.

Millions of pounds intended for council housing and tenants had been wrongly and unlawfully transferred to the authority’s general fund over a series of years.

It is estimated the cost of the problem is around £51m.

In response the firm was commissioned again to deliver a 12-week remediation programme following its review.

While Audit Committee documents, which will be discussed on September 29, say the programme is “on track” and controls on all 39 issues have been agreed, only 38 per cent of improvements have been fully put in place so far.

The director of finance at the council, Shabana Kausar, said in July the authority should have the improvements in place in September.

Council documents say: “Weekly project checkpoint meetings with EY are being held with additional meetings held with the corporate director finance and resources to provide progress and seek decisions at relevant milestones to ensure the control environment is improved at pace.

“Subject to any additional findings identified through phase one of the remediations work, the improvements to the control environment are expected to provide the assurances required by the [section] 151 officer to discharge their statutory responsibilities.

“To end of August 2023 all of the 39 remediation activities identified had
agreed controls in place.

“38 per cent have been fully implemented at the end of this period, three per cent as reported in July 2023, with 62 per cent in process of being implemented over September.”

In July Ms Kausar said 37 improvements, or ‘controls’, had been identified.

This has since risen to 39.

Branded “quick fixes”, they will help the council strengthen its financial leadership, design a robust system of internal financial controls and embed professional accounting practice.

According to documents the accounting firm, working with council staff, will be continuing to “prioritise tasks for implementation” with a view to having the improvements put in place throughout September.

The 39 improvements come as part of phase one of the programme and will ensure the council has the “essential basics in place”.

However it is anticipated further improvements will be needed.

“Some areas are challenging to implement interim measures for because they
require a significant overhaul of systems for the council to meet statutory
requirements,” the council adds.

“However, it is important these are identified and closed in the next phase of the remediation works.”

(Visited 1 times, 1 visits today)