Auditors discover £1.6m missing from council revenues

Things are just not adding up properly at Croydon Council, writes Town Hall reporter KEN LEE

So how has Croydon Council managed to misplace £1.6million of public money?

Competence: Croydon CEO Jo Negrini

That’s the question arising from Grant Thornton’s audit of the local authority’s affairs in the financial year up to March 2017.

Auditing and reconciling accounts really can be fun. Seriously. The money is not lost – it might be in an old suit pocket in a wardrobe somewhere or dropped down the back of the sofa in one of the executive areas of Fisher’s Folly.

But with the competence of the council now a matter of growing public concern after the Ofsted report into the inadequacy of Croydon’s children services, this is an audit report that Jo Negrini, the borough clerk, and Labour councillors could do without.

The auditors say, dryly, “We have noted a variance of £1.6m in respect of Council Tax revenues for the Collection Fund between the Northgate revenues system and the general ledger.

“Management was not aware of this discrepancy, and it has yet to be reconciled by management.”

But the management will find it, for sure. They know it’s somewhere.

The council’s management needs to find this loose change by November and sort out the discrepancy in the council’s accounts by February.

Their job is not helped by a weak IT system where, “IT auditors highlighted weakness in access controls and IT security.” Which is hardly reassuring given that Croydon is midway through an eight-year megadeal with contractors Crapita whch is costing £73.5million.

In their latest report, the suits from Grant Thornton also tell Croydon Council that, “Your finance team does not have a clear process for identifying fully depreciated plant and equipment and infrastructure assets that have been taken out of use.”

This suggests that the council does not keep a thorough record of what it owns. Maybe some of those odd bits and bobs of property and equipment might be found down the back of the executive sofa, too?

The council, according to Grant Thornton, has been too optimistic in its separate Housing Revenue Account as to how well-placed its tenants are to pay their heavily subsidised rent. A harsher regime in debt collection had led to expectations of less unpaid rent, but that tough approach has been ineffective, not getting in much extra money. Grant Thornton recommend adding an extra £1million to £2million in bad debt provision.

It has taken the children’s services crisis for Negrini and her council’s executive directors to admit that creating two mega-sized service departments – with those wonderfully nebulous conceptual “Place” and “People” titles – was a mistake. A big mistake.

The last thing that Tony Newman, the council leader, and his fellow Labour councillors need now is the realisation that the normally reliable finance department is fraying at the edges, too.

A loss of public confidence in the Labour council’s competence has put the local Tories back in play for the local elections next May. Audit reports such as this will just give Croydon Conservatives more ammunition to add to the plentiful supply of damning quotes from Ofsted about what independent inspectors see as the council’s ineffective leadership.

More on “inadequate” Croydon:

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News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email
This entry was posted in 2018 council elections, Barbara Peacock, Council Tax, Croydon Council, Jo Negrini and tagged , , , , , , , . Bookmark the permalink.

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  1. Pingback: Auditors discover £1.6m missing from council revenues — Inside Croydon | L8in

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