Liverpool Council’s auditors have defended their work amid claims they ‘dismissed concerns’ about its finances after a damning government report found the council was not providing the best value for money to council taxpayers.
The report, by Max Caller, found a litany of failings across specific areas of the council, including regeneration, planning and property management.
Commissioners are now set to be sent to the city to oversee radical overhauls of those areas.
Grant Thornton, which carries out the yearly external audit of the council’s finances, has not fully certified the council’s accounts for five years due to police investigations involving the council.
However, it has signed opinions on the accounts during those years, judging that they were in order.
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Representatives from the company told the council’s audit and governance committee that it would be undertaking further assessments of the accounts after the publication of the Caller report.
Speaking at the committee meeting yesterday evening, Lib Dem councillor Andrew Makinson said auditors had dismissed concerns about the accounts made by opposition councillors.
Councillor Makinson said: “The taxpayers of Liverpool have been paying £191,000 to Grant Thornton to provide assurances that the city’s accounts are in order.
“While you’ve not been able to to fully certify them … you have repeatedly provided value for money assurances and various concerns raised by opposition councillors have been rather dismissed by yourselves.
“Perhaps you could explain to the taxpayers of Liverpool why they should have confidence in Grant Thornton to continue in this role.”
Andrew Smith, from Grant Thornton, said he was confident that the firm had acted properly.
He said: “We are not party yet to the details of the police investigations and what they may find so it is very difficult for us to do additional work in response to that without knowing all the details. That’s why we haven’t certified the audit for a number of years.
“Obviously, the external audit largely is focused on potential fraud issues like extracted fraud, i.e theft or loss of assets or cash, or indeed financial reporting fraud.
“We are confident in the work we’ve done in those areas and I don’t believe there’s anything in the Best Value Report that lends itself to that type of fraud.
“There are very serious Best Value issues in there but there is a limit to what we can do around that in terms of the requirements of the VFM [Value for Money] work.”
He said external auditors were reliant on internal management to flag issues in the accounts and this had not been done prior to the arrival of new chief exec Tony Reeves.
Mr Smith said: “Until recently, with the likes of Tony [Reeves] and Mel [Creighton], those issues, I believe, were not flagged up to us at all and I think the Best Value report says that as well.
“In addition to that, there has been nothing that’s been, until more recently, identified through the work of internal audit, which is another line of defence.
“From our point of view, when we have been doing our risk assessment there have been no red flags to us of these issues until more recently when the arrests took place.
“I believe we’ve acted appropriately and we are confident in the work we’ve done.”
It was an internal audit report, later handed to Merseyside Police, that sparked the enquiries that became Operation Aloft.
That investigation has seen the arrest of five men in December, including then Mayor Joe Anderson.
A previous round of arrests saw then council regeneration chief Nick Kavanagh arrested alongside property developer Elliot Lawless.
Mr Kavanagh was sacked by the council earlier this week.
The three men deny wrongdoing.
