Wednesday, March 11, 2015

News: Rotherham Council fails external audit

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Rotherham Council has failed an external audit for not making proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

The government's Audit Commission, which oversees spending by local government, is in the process of winding down and instead local councils are using external auditors from the private sector to assess their abilities in areas such as meeting legal requirements, financial statements, value for money and financial resilience.

External auditors at KPMG have this week published its conclusion in relation to value for money at Rotherham Council in 2013/14. The auditor would need to be satisfied as to whether there have been effective arrangements to secure economy, efficiency and effectiveness in the use of resources.

KPMG stated in November that it was waiting on external reports being published before it could reach its conclusion. Children's services in Rotherham remain "inadequate", according to a recent OFSTED inspection and a statutory inspection of Rotherham Council, undertaken at the request of the government by Louise Casey, concluded that Rotherham Council has failed its citizens, is failing to comply with the statutory best value duty and needs a fresh start.

Triggered by a report into child sexual exploitation in Rotherham that described how vulnerable children have been repeatedly failed by the council, the Casey report highlighted significant governance weaknesses. Specifically it reported that the authority was not fit of purpose and failing in its legal obligation to secure continuous improvement in the way in which it exercises its functions.

There are 11,000 paid staff of the Council who run the local authority on a day to day basis. As one of the borough's biggest employers the council had gross income and expenditure of over £700m last year.

A report to the Council's Audit Committee states: "KPMG were satisfied that the Council's medium term financial planning is sufficiently robust to enable it [to] manage its financial risks and to continue to provide services effectively in the face of continuing funding reductions.

"However, they were unable to reach a conclusion on whether the Council has put in place proper arrangements for securing economy, efficiency and effectiveness pending the OFSTED and Corporate Governance inspections being published.

"KPMG have now had an opportunity to consider the OFSTED inspection into Children's Services in Rotherham and Corporate Governance Inspection now that they have been published. The conclusion they have reached is that the Council has not made proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2014."

The auditors also concluded that the authority has made proper arrangements to secure economy, efficiency and effectiveness in the closure of Digital Region Ltd, a decision which could cost £6.2m.

Given that the Government has already intervened and parachuted in commissioners to take over all of the council's executive functions, it is unclear what the adverse conclusion will mean.

Images: RMBC

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