Date set for sign off of Luton Borough Council’s historic accounts audit

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October date set for sign off of first of LBC's historic accounts as external auditor's offer qualified opinion, a meeting was told

Historic Luton Borough Council accounts dating back to 2018/19 are set to be signed off in October, with deadlines eased for the subsequent years, a meeting heard.

External auditor Ernst and Young (EY) has a difference of opinion with the local authority over the development consent order (DCO) cost relating to the council’s airport company London Luton Airport Limited (LLAL). EY is expected to complete its work next month in preparation for the sign-off, according He told a scrutiny finance review group meeting: “We’ve agreed everything now. There’s nothing new. There’s the one item we’ve agreed to disagree about over the development consent order (DCO) cost.”

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Mr Gopal explained: “The only thing I mentioned to the [financial] committees last time was an adjustment, which was done about 18 years ago. But now EY has agreed we’ll not be making changes to the accounts. We’ve agreed on the format of the audit report as well.”

Exterior of Luton Town Hall (Picture: Olivia Preston via National World)Exterior of Luton Town Hall (Picture: Olivia Preston via National World)
Exterior of Luton Town Hall (Picture: Olivia Preston via National World)

EY is aiming to sign off in September, he said. The director added: “The auditors have a lack of resources as well. The government is looking at how to reset the system. Otherwise, everything is done. Fingers crossed we’ll get that signed.”

Liberal Democrat Stopsley councillor David Wynn asked if qualifications on the accounts would affect the council after the sign-off.

Mr Gopal replied: “There’s a distinction between the council accounts and the group accounts. That LBC account isn’t going to be qualified [by the auditor]. There are various degrees of qualification. The auditors are saying there’s a limitation of scope on the DCO costs.”

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The director went on to say: “The reason we have a different view is LLAL has had two auditors, PricewaterhouseCoopers and Azets, the new one, last year. When we consolidate it’s difficult for the council to override and I, as the section 151 officer, have to go with the best advice in front of me.

“We respect EY’s opinion. And on the other side, there’s both opinions of the respectable and reputable auditors for LLAL. Those [figures] haven’t been qualified in the LLAL accounts.”

According to Mr Gopal, the council’s accounts are showing an increase in the value of London Luton Airport – with the last one at about £1.3bn. He said: “The value of the group asset has gone up by £700m to £800m.

“The auditor’s timetable is it completes the work in September and we sign on October 11th.”

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The government is resetting the dates by which subsequent years’ audits for 2019/20, 2020/21 and 2021/22 have to be signed off, added Mr Gopal.

“Staffing resources are partly responsible, with a December deadline for the 2019/20 audit and September 2024 for the 2020/21 and 2021/22 sign-offs. Once 2018/19 is signed, that’s where the main issue was.”

The review group approved a recommendation to the audit and governance committee for a statement to be produced showing what LBC’s status is on the sign-offs.