Auditors Refuse To Sign Off Council Accounts For Second Year

Financial concerns continue at Harborough District Council after external auditors declined to sign off its accounts for the second year running.

A disclaimer of opinion has again been issued, meaning auditors cannot confirm that the 2024/25 financial statements are accurate.

The decision follows ongoing issues with a new financial system and unreconciled transactions, as well as a wholly owned subsidiary failing to meet its statutory filing obligations for the second year in a row.

Auditors Grant Thornton say significant work is still needed before assurance can be restored.

Harborough District Council’s HQ is the Symington Building in Market Harborough

In response, the council has set up a dedicated Accounts Recovery Team and is implementing a detailed plan to address the issues.

Cllr Jim Knight, Cabinet lead for Finance, said: “The council is recovering a very challenging situation and has made good progress in the four areas of audit concern that were raised last year.

“This work continues and every effort is being made to make the necessary changes and improvements so that the closure of 2025/26 will be better than the previous year.”

The challenges date back to October 2023, when the new financial system was implemented, leading to ongoing issues with bank reconciliations,

The previous year’s disclaimed audit opinion and the resignation of key finance staff in 2024/25 prompted the creation of the Accounts Recovery Team in April 2025.

Cllr Paul Bremner (Con) told a recent meeting of Audit and Standards Committee that people need to be held to account for the situation:

A wholly owned subsidiary of the council has failed to meet its statutory filing obligations for the second year in a row.

Grant Thornton considered issuing a Statutory Recommendation to notify the Ministry of Housing, Communities and Local Government of the position, but is satisfied that the council is making progress in addressing the issues.

Auditors have also highlighted 13 recommendations for management to work through, alongside follow-up of prior-year audit concerns.

While progress has been made in reconciling transactions and providing information to auditors, further work is required to produce accurate and timely financial statements and to restore full confidence.

Officers say the detailed recovery plan is ongoing, and progress will continue to be assessed as part of the 2025/26 audit.