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Further delay in finalising unitary's accounts to cost extra £300k

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There has been a further delay in signing off Reading BC’s 2016-17 accounts – a year after the original deadline passed.

A report due to be considered by the council’s audit and governance committee on Thursday said a series of issues had been identified by external auditor EY in a revised draft statement of accounts submitted following a meeting last month.

The report by head of finance Matthew Davis said the council had agreed with EY that it was not viable to “identify sufficient evidence to substantiate some creditor and debtor balances… given the passing of time and the turnover of officers”.

Mr Davis said the auditor is now likely to attempt to establish whether Reading owes particular liabilities or whether it has an asset, and whether what has been recognised has been appropriately valued.

The report added there remained “a number of fixed asset and capital accounting issues to be resolved with the EY” which will “impact on the value of property, plant and equipment and two of the unusable reserves.”

Council consultants are said to have advised further changes to the accounts for two public finance initiative schemes.

The report said: “EY still need to complete the audit of a number of other areas of the accounts but are making good progress.”

However, the report said the external auditor is unlikely to be able to provide an opinion on the accounts until late October or early November.

Moreover, it added the 2017-18 balances will also be qualified “due to uncertainties around the creditor and debtor balances”, with entries in the ledgers unable to be finalised until the issues with fixed asset and capital accounting in 2016-17 have been resolved. This is expected to happen by the end of November.

The additional work required by EY is set to result in the audit fee being £300,000 more than the originally expected cost of £108,938.

Reading has been approached for comment.

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