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Computer problems lead to qualification for Aberdeen City Council accounts

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4th Dec 2008
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Aberdeen City Council's auditor Henderson Loggie has qualified the council's 2007-08 accounts due to shortcomings in the council's new accounting systems.

The auditor's report was considered by the council's scrutiny panel this week and drew the qualification because the firm was unable to obtain evidence to confirm that all the council's bank transactions had been properly recorded. The problem was due by the introduction of a new computer system, according to the Compute Scotland website.

Henderson Loggie auditor Ian Robbie attended the panel meeting and described the qualification as significant. The issue had first been raised last November and could have been discussed in April, but councillors had postponed the meeting. "It’s down to councillors when an issue has been made whether councillors instruct a report to come forward," Robbie told the scrutiny panel.

The council committee decided an internal investigation was not needed as sufficient measures were being taken to reduce the transaction backlog. But that did not satisfy the SNP deputy leader, councillor Mark McDonald, who called on Scotland’s Auditor General Robert Black to review the audit process.

"I make no claim of expertise in the accounting and technical matters, but my position is that the external auditor was due to report in April, but it was not until September that [the report] was considered. If the information had come forward earlier, more could have been done to remedy the situation and the accounts would not need to have been qualified," Cllr McDonald told AccountingWEB.

Ian Robbie cited client confidentiality and referred enquiries for more details about the situation to the council and Audit Scotland. Aberdeen City Council has yet to reply, but Audit Scotland said that the city has been in the news for much of the year because of the parlous state of its finances. Former chief executive Douglas Paterson announced his retirement on the first day of the May meeting and was replaced by Robert Coomber as interim chief executive.

Sue Bruce, previously chief executive at East Dumbartonshire Council, was introduced as the new Aberdeen chief executive at Tuesday's scrutiny meeting and will now look for £60m savings in the next two years to get the city council back on a stable financial footing.

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By AnonymousUser
23rd Dec 2008 13:53

Which System
Which system were they implementing?

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
16th Dec 2008 17:59

Still awaiting response
Graham,

Thanks for your comment. I was thinking very much the same thing and asked the council's press office for further details. They said "you'll just have to wait" when I called back. Thanks to you reminder, I'll go back and ask again.

If the finance department is similarly efficient, I'm not surprised that the city council has got into such a mess.

John Stokdyk
Technology editor
AccountingWEB.co.uk

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By neileg
15th Dec 2008 13:04

Very curious
If the matter had been raised last November, 2007 presumably, then the council's staff must have been aware of the problem even earlier in the year. Blaming the auditors or the scrutiny committee smacks of shooting the messenger. Or do we conclude that the council doesn't do bank reconcilliations as a matter of routine?

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By Gmichie
10th Dec 2008 13:38

Accounts Qualification
It is indeed worrying that such a qualification has been put on the accounts of a public sector organisation. Can we clarify which system was being used, and whether the fault lay with the internal input of information or a poorly designed system.

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