'Significant weakness' in the accuracy of Birmingham's accounts

The end of last week gave us a pretty worrying insight into Birmingham City Council’s bookkeeping as the district auditor refused to sign-off the local authority’s 2009/10 accounts citing 'significant weaknesses' in their accuracy.


According to the Birmingham Post, this refusal will cost taxpayers an additional £60k in extra auditing taking the total to £762,875.


Birmingham City Council Paul Dransfield, the Director of Resources at the council, has noted that there is a ‘big learning curve’ for the accounts department, but it seems that this is rather an understatement given the discrepancies listed:


• Buildings and land owned by the council were said to be worth £6.6 billion. The true figure is £5.5 billion.


• The cost of council services was set at £1.23 billion in the accounts. The true figure is £1.66 billion.


• Invoices from suppliers of goods were overpaid by £281,000, with some companies benefitting from being double-counted on an electronic payments system.


So, dramatic overestimating, underestimating and pretty lamentable oversights won’t do much to boost public perceptions or lead us to place much faith in BCC. Would any business that was run on the basis of such erroneous assumptions have survived the recession?


Revelations like this just prompt further questions about how this local authority is being steered. Some may argue that the day-to-day running of the place and provision of services has lately taken a backseat to international aspirations and legacy leaving by prominent local politicians.


There’s nothing wrong with Birmingham vying to be a global player, but like everything else, it’s still vital the basic housekeeping is ship-shape, because though you may be able to dress your rusty engine in the chassis of a sports car, ultimately you’ll still break down.


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