Harringay, Haringey - So Good they Spelt it Twice!
£51,400,000 gap in Haringey Council budget?
THE DISCLAIMER
Last month in an Opinion Piece in the Ham & High, the current Haringey council leader claimed there was a £51.4 million gap in the council's budget.
This figure—to the nearest £100,000—implies a calculation with an accuracy of close to 0.2% which in the scheme of things, suggest precision.
But how credible is that figure of £51,400,000?
Rather than an estimate with an accuracy of 0.2%, might it not have been better to give a range? i.e., at least £x and not more than £y?
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Last week, the external Auditor published their draft Audit report (228 pages, 17mb pdf) for a meeting of the council's Audit Committee. It makes for sobering reading. The beady eyes of external Auditor BDO appear to have uncovered a litany of problems going back over three years (pdf). They cover the period of the Covid pandemic and of the Administration under the previous leadership.
So much so, that they “anticipate issuing a disclaimer of opinion on the financial statement”.
Disclaimers are also their intention for all three accounting periods. My understanding is that an Audit can conclude with one of broadly four Opinions. i.e. that the accounts:
- give a true and fair view
- give a true and fair view with certain qualifications
- do not give a true and fair view
- are in such a mess or are unavailable, that it is not possible to form a view
Is it not the case that a Disclaimer Audit Opinion is the least satisfactory for an Auditor to give?
Given the lack of available data, as disclosed in the draft Audit Report, in order to be able to calculate the budget gap to a tolerance of 0.2% seems heroic in the circumstances of an audit leading to No Opinion. Is the gap really all down to the increased spending in Adult Social Care and Temporary Accommodation?
Tags for Forum Posts: Audit, BDO, Disclaimer, Haringey Council, Opinion
Replies to This Discussion
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Permalink Reply by Clive Carter on
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In respect of that gap ("balance"), I see the council commented that:
• In relation to a query regarding the £50 million balance, the meeting heard that this was an assumption of where, at the beginning of the year, the Council figured its cash balance to be. For example, last year, the Council averaged around £70 million over the course of the year as the Council had received a lot of grants. This year, the Council had not had the same fortune of receiving as many grants. The Council, at the beginning of the year, had about £83 million, but it was becoming apparent that the balance was closer to £30 million. Over the course of the year, the average was expected to be to probably be slightly below the £50 million balance. However, the rates that the Council was still able to invest remained higher. The Council was still expecting to be on budget. There may be room for the Council to underspend on the interest, but this depended on how the rest of the year would progress.
Page seven of the Public reports pack
03122024 1900 Audit Committee
(in terms of the pdf, page 11)
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Haringey Council scrambles to plug budget gap as reserves ‘exhausted’
(Haringey Community Press)
With £39m extra needed for 2025/26 council finance chief admits only a quarter of savings have been found, reports Grace Howarth, Local Democracy Reporter
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