September 2023
For nearly six years, Cambridgeshire County Council (CCC) deliberately
overstated its debtors and usable reserves in its financial statements by an
aggregate amount of £378 million. Two
formal objections to the accounts on the matter in 2018 and 2021 by former
County Councillor Mike Mason and me were simply ignored by the auditors (BDO
and EY). It was only after the false
accounting was exposed by Private Eye magazine in November 2021 (see Appendix
1) that CCC and EY corrected the 2020/21 “error” of £160m. But they declined to correct the identical prior
year errors totalling £218m on the grounds that they were “not material to
the users of the accounts.”
During the statutory accounts inspection period last month,
I sought to establish that the £40m City Deal grant for 2022/23 had been
properly spent. I asked CCC’s Head of
Finance, Mr......... for a reconciliation of grant income and expenditure during the year, and a
list of the cost centres used to ring fence City Deal expenditure from the rest
of the council’s business. City Deal is
a Greater Cambridge Partnership programme (GCP). At the agreed documents inspection meeting on
22nd August at New Shire Hall,...........denied my request, and asserted,
incorrectly, that he did not have to answer any questions about the
accounts. When shown the NAO’s guide to
the public’s rights,............ claimed questions could only be put in writing. Also not true. My written questions about City Deal were
ignored until 29th August, when I received the set of balances shown
in Appendix 2 below, and a list of 65 names of supposed City Deal Cost Centres.
46 of these were not cost centres at all, and it was not
until 1.41pm on the final day of the statutory inspection period that Mr ........ sent me a revised “full list” of City Deal cost centres in the last
of 32 attachments in one email.
When matched with the council’s published expenditure, those
cost centres had only paid out £16.7m in 2022/23 – nearly £11m lower than Mr.......... £27.8m figure
for the accounting year.
When the reconciliation is extended back to earlier years
(see Appendix 2), it appears that nearly £47m of City Deal government grants
earmarked for specific GCP infrastructure projects might have been spent on
CCC’s own goods and services not connected with City Deal, possibly breaching the
grant conditions that for years CCC and its auditors claimed did not exist.
When I informed Mr ........of my findings, the Head of Finance claimed that he
could not answer any more questions because the inspection period was now over. His action is unlawful because, as
established in the case of Moss v RB Kingston in 2021:
“section 26 of the Local Audit & Accountability Act 2014 does not allow a relevant authority to refuse to process an inspection request on grounds of the time it will take to satisfy the request” - see paragraph 83.
Mr........ conduct in previous inspection visits has been equally obstructive and unprofessional. Getting to the bottom of this matter is important because the public (and presumably the government) need to know whether many millions of pounds of grant money have been correctly spent in a way that complies with the City Deal grant conditions that the authority is well aware of.
I am a former auditor with Price Waterhouse and have worked
in business software applications (ERP) and data mining for nearly thirty
years. In recent years I have
specialised in local authority finances.
Issue 1575 – 15th June 2022
Appendix 2 – City Deal grant reconciliations
This is the set of balances provided by the Head of Finance on 29th August 2023:
The tables below show City Deal grant income and net expenditure matched to the set of revised City Deal cost centres provided by CCC’s Head of Finance.
The two reconciliations below show how nearly £47 million of City Deal grants received by CCC on behalf of the GCP have not been accounted for. £10.88m is unaccounted for in 2022/23, whilst the opening balance above indicates that around £36m may have been spent in previous years on goods or services unrelated to City Deal projects.
