Council misses deadline to publish accounts over business centre scandal
- Credit: Archant
A council has missed a legal deadline to publish its accounts because of a scandal over a business centre.
King's Lynn and West Norfolk Council was meant to publish its draft accounts for 2018/19 by the end of May.
But it said that "clarification issues of business relationships surrounding King's Lynn Innovation Centre (KLIC) and other operational and resourcing matters" would lead to a three-week delay.
The council handed over almost £5m, including a £2.75m loan, to enterprise agency NWES to build the KLIC.
But it carried out no checks and NWES could not afford to pay the money back.
Legal agreements between the council and NWES were "inappropriate", heavily favoured NWES and were not signed by the council, an internal council investigation earlier this year revealed.
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In a report to the council's audit committee on Monday, Ernst & Young said that the building did not match the value of the loan, meaning the council is struggling to get its money back.
The auditors said that there was now a risk that the council's financial statements were "misstated".
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Ernst & Young are now reviewing how the council handled the loan and the legal advice they got.
They said: "There is an audit risk... that the Council did not have proper arrangements to ensure it took properly informed decisions and deployed resources to achieve planned and sustainable outcomes for taxpayers and local people."
External investigators are also going to be brought in.
Chief executive of NWES Jo Clarke, who was appointed after the KLIC deal was signed, said they welcomed the investigation and continued to cooperate with the council over finding a solution.
Read more: Our investigation into NWES