Auditor to investigate Morecambe Town Council for second year running after complaint

The chair of Morecambe Town Council says they have "nothing to hide" as the council faces an independent investigation for the second successive year.

An external auditor will be looking into the town council following a complaint by a member of the public, it has been revealed.

Councillors heard at a meeting on Thursday that the same resident lodged a complaint against the town council in the previous financial year too, but an investigation found there was no wrongdoing by the council.

The town council says the complaints are "unfounded" and the 2020/21 investigation cost the taxpayer more than £12,000.

At Thursday's Morecambe Town Council meeting, proper officer Luke Trevaskis told councillors that an annual internal audit could not be signed off until this investigation - by external auditors PKF Littlejohn - had concluded.

Mr Trevaskis said he did not know the nature of the complaint but the council would be facing questions from the external auditor about it.

He said the complaint made by the same resident in 2020/21 was a "400-page document" and that the town council had faced a bill for the investigation even though it concluded there was no fault with the council.

Councillors spoke out in the Morecambe Town Hall chamber about the situation.

"It seems wrong that we don't see the complaint," said Councillor Patricia Clarke.

Councillor Louise Stansfield said: "It's costing the council money every year, when they could be criticising us on what we are spending our money on. It's crazy."

Mr Trevaskis said: "We have to engage in the process and we have to respond to the questions.

"It's important that this process exists. It's important for electors to have the opportunity to have their local authorities independently assessed. It's unfortunate that it comes at a cost to the Morecambe taxpayer."

Councillor Cary Matthews, chair of Morecambe Town Council (pictured below), said: "It's clear that we are all disappointed with this, but we have got to do the right thing and we have nothing to hide."

Mr Trevaskis also said that Morecambe residents have the right to come into the town hall and examine the town council's accounts if they wish.

Speaking after the meeting, Mr Trevaskis said: "Each year the council must undergo an internal audit and submit an Annual Governance and Accountability Return (AGAR) to the external auditor.

"Morecambe Town Council is pleased to announce it has received a clean internal audit for 2021-2022 and submitted paperwork to the external auditor for certification. 

"However, it is likely an additional budget will need to be found next year to accommodate growing costs owing to a resident who is thought to be submitting unfounded complaints to the external auditor against the council. 

"The process for submitting complaints to the external auditor is an important democratic right, and when used correctly can help improve standards in local authority administration. 

"The external auditor is duty-bound to undertake an investigation when any complaints are submitted, and the council is recharged all costs whether or not the complaints are upheld. 

"Last year, a 400-page complaint, submitted by one resident to the external auditor, cost Morecambe taxpayers £12,117.88.

"The external auditor found at the conclusion of the investigation that activities undertaken by the council were 'in accordance with Proper Practices', further clarifying that 'no matters have come to our attention giving cause for concern that relevant legislation and regulatory requirements have not been met'.

"Despite such a positive outcome for the council last year, the council has been notified by the external auditor that a resident has submitted a complaint again this year which will need to be investigated in the same manner. So far, it is unclear what cost will be recharged to Morecambe taxpayers."

Mr Trevaskis said the audit and investigation costs broke down like this:

Internal Audit cost: £800.00+VAT

Standard External Audit cost: £400.00+VAT

2020-2021 External Audit Investigation: £2,343.00

2020-2021 officer time required to respond to (400 page) external audit investigation: £9,774.88

The town council's internal audit was carried out in 2021/22 by accountants JDH Business Services Ltd.

A report said it found that the council "has met all of the internal control objectives it possibly could" in 2021/22, "unlike in previous years".

The 2020/21 internal audit by JDH had 20 recommendations for the council to carry out after finding "significant issues that cover almost the entire scope of the council business, internal control objectives and associated governance".

The 2020/21 internal audit report said that "until the latter part of the 2020/21 financial year when the new clerk and council took comprehensive action to address identified issues, there were numerous financial internal control weaknesses at the council".

It said: "Due to the fact that internal controls were not operating effectively for a significant portion of the financial year, and on the basis of the internal audit work carried out, which was limited to the tests indicated above, in our view the council’s system of internal controls was NOT in place, adequate for the purpose intended and effective, and all outstanding recommendations in the action plan should be implemented promptly."

The auditor has now confirmed that most of their recommendations, aside from some additional training for councillors, had now been met.

The 2021/22 internal audit also said Morecambe Town Council had complied with all financial regulations, had published information on its website in accordance with transparency code requirements, and had kept accounting records properly during the financial year.

The report raised only three "small matters" which did not affect the outcome. There was an incorrect day on an audit document due to an individual error, the council was advised to start using more advanced accounting software, and to remove low expenditure items from its asset register.

Morecambe Town Council has published a 'notice of audit' which says: "The audit of accounts for Morecambe Town Council for the year ended 31 March 2022 has been carried out but cannot be completed for the reasons stated in the external auditor report."

The external auditor report says: "We are unable to complete our review work on the AGAR and supporting documentation as a result of correspondence received in relation to 2021/22 and/or prior years.

"Once we have finalised our review and completed any additional work arising from that correspondence, a final report will be provided with the certificate of completion detailing any qualifications and ‘other’ matters."

At the same meeting on Thursday, it was announced that Morecambe Town Council has been awarded 'Quality Gold Status' in the National Association of Local Councils 'Local Council Award Scheme'.

The council has become the first parish/town council in Lancashire to achieve the recognition, for "its exceptional high standards in transparency, governance and community impact".

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