Doubts raised on council accounts

The authority was heavily criticised in its last report

North East Lincolnshire Council is again under fire from government inspectors over its finances.

The Audit Commission has refused to sign off the authority's accounts for two financial years because of doubts about their accuracy.

This is despite the council being given time to sort out a "major breakdown" in financial controls revealed in a report last year, the watchdog said.

The council said a new finance team was working hard to resolve the issues.

The Audit Commission issued a Public Interest Report (PIR) in March 2004 highlighting poor financial controls at the council which had left it with a £9m deficit.

I am confident that by the end of this year we will have a good set of accounts and the commission will give this council a clean bill of health John Harrison, council executive director

The commission said the scale of the breakdown meant it could not adequately test the validity of the accounts for 2002/03 and 2003/04.

District auditor Sue Sunderland said the council had been unable to fully explain or resolve all of her queries because of the significant changes in staff since the first report.

She said the commission had no alternative but to give a "qualified opinion" - an accounting term used when the scope of an audit has been restricted or financial records have departed from accepted accounting principles.

Hard work

John Harrison, executive director of corporate services at North East Lincolnshire Council, described the audit commission's stance as "disappointing but not surprising".

He said its decision was a result of problems with the authority's financial arrangements during the previous period.

"These issues were the subject of the PIR (in March 2004) and since then we have been working hard to put in place robust financial controls.

"I am confident that by the end of this year we will have a good set of accounts and the commission will give this council a clean bill of health."