Council delays accounts sign off after £100 million error found

Elgan Hearn – Local democracy reporter

Signing off a council’s accounts for last year could be delayed until next April after a £100 million accounting error was found in the ledger.

At a meeting of Blaenau Gwent County Borough Council’s Governance and Audit committee meeting on Monday, November 17, councillors and lay independent members were given an update on the progress being made to complete work on the accounts for 2024/2025.

Back in September, finance chiefs had been hopefu that last year’s accounts could be closed by the end of the year – but snags have now been found.

Senior finance business partner, Tony Hagland appeared before the committee and apologised that the draft accounts had not yet been completed.

Mr Hagland said: “Unfortunately very substantial errors were identified.

“In particular there was an error around the pension accounts.

“The information that had been provided was incorrect to the extent that it would have meant a misstatement in the accounts of £100 million.”

He stressed that this is not “real” but “accounting” money and that the council has: “not suddenly lost £100 million.”

Mr Hagland said: “It’s the way we have to account liabilities when we have exceeded the assets ceiling,”

He added that this had been added to accounting procedures to stop people: “running off with pension funds.”

Mr Hagland explained that he had to go back to the fund actuary to get the right set of figures which had caused the delay.

Mr Hagland said: “We could not present a set of accounts to you or audit (Wales) that were a £100 million or more out.”

Cllr Lisa Winnett (Labour – Blaina) said it was a “real concern” that such a large mistake had been made on information provided to the council.

Cllr Winnett said: “This is setting off massive alarm bells for me, well done for spotting it.”

Independent lay member Martin Veale: “We’re not alone in having pension fund issues, I know there have been the cases across a number of other public sector bodies over the last few years due to the quality of the pension figures that come through.”

He asked who manages the pension fund?

Mr Hagland said that Torfaen County Borough Council administer the pension fund.

The “Greater Gwent” pension fund manages pensions on behalf of Blaenau Gwent and several other public bodies in South East Wales.

Mr Hagland added that when chasing the information he had gone “direct to the actuary” rather than to Torfaen.

Mr Veale said: “While it’s disappointing it’s pleasing that we picked it up rather than Audit Wales spot this and them come back with a long audit list saying we found all these things wrong.”

He asked for the “best guess” of when the accounts will be signed off?

Director of Corporate Services and s151 officer Rhian Hayden explained that the Audit Wales staff that were allocated to deal with the council’s accounts had now been reassigned to work on other audits.

This means that Blaenau Gwent’s accounts would now be at the: “back of the queue.”

Miss Hayden said: “We would hope to get it completed by April.”

The report was noted by the committee.