A software change has caused a two-month delay to the publication of Lancashire County Council’s draft accounts.Advertisement
The hold-up has been blamed on the introduction of a new internal system, which the Local Democracy Reporting Service (LDRS) understands has also caused a plethora of problems for staff – including wage, pension and holiday issues.
A meeting of the authority’s audit, risk and governance committee heard that the process of migrating to the Oracle Fusion platform had resulted in the reconciliation of the 2022/23 accounts taking longer than usual – and the statutory deadline of the end of May being missed.
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However, members were told that County Hall’s external auditors had agreed that a delay in submitting the figures was the best approach under the circumstances – and it is hoped that they will now be ready by the end of this month.
A source has told the LDRS that the switch to the new multi-purpose system has had an impact on various aspects of the county council’s operation since its introduction at the end of last year.
It is understood that there have been issues with payments to suppliers, while staff working variable hours or who are entitled to enhanced payments have struggled with ensuring that their wages are correct.
It has also been difficult for employees to account for holidays and some retired workers have not been paid their pensions in the normal way, the source said.
A report presented to the committee meeting revealed that the delay to the publication of the draft accounts had arisen as a result of moving to a new accounting ledger in January, three quarters of the way through the last financial year.
That meant that additional work was needed to ensure balances had been “appropriately transferred” between the two systems and also to review transactions that took place during the crossover period.
Khadija Saeed, Lancashire County Council’s head of corporate finance, said that the situation was “hugely disappointing” for her and her team – not least because they “pride themselves on doing [the accounts] early in normal times”.
She added: “We consulted with our external auditors on the basis that, due to implementation of our new accounting system during the year, [a delay] would be the best approach to ensure that we had enough time to complete the reconciliation work before we actually published our accounts.
“One of the main reasons was that – although we were always expecting to do this work as a result of the implementation – the cut-off period…between the two systems lasted longer than we had originally planned. So that has meant that the reconciliation work has taken place a bit later on in the year [and] hence pushed the point at which we would feel comfortable to publish our accounts into July.”
Committee chair Alan Schofield described it as “unusual” for the county council to find itself in the position that it now did – but acknowledged the cause.
However, committee member Mark Clifford said he feared that there would be a “knock-on effect” for the authority – and asked whether the situation could damage County Hall’s “creditworthiness”.
Khadija Saeed said that there would be no “direct effect” – and that the risk was more one of a “perception issue” for the public and stakeholders. She also stressed that there was “an appropriate explanation as to why [the delay] has happened on this occasion”.
The draft accounts should be made available for inspection by the public for 10 days in June. That opportunity will now come after the delayed publication.
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Sarah Ironmonger, a partner with county council’s external auditors, Grant Thornton, said that there had been “an ongoing dialogue about when is the appropriate time for the audit”.
She added: “We are supportive, when you have had a big change like this, of the finance team taking the time to be satisfied that they are happy with the accounts before they come to the audit – because that’s just a very sensible, pragmatic approach.”
Responding to the issues raised about the broader problems caused by the implementation of the new system, a spokesperson for Lancashire County Council told the LDRS: “Many of the initial problems experienced with the introduction of our new system for managing finance, HR and payroll processes have been resolved.
“We are aware of a small number of outstanding issues and have an agreed programme of fixes to ensure these are resolved quickly and apologise for any delays which have been experienced.”
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