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Serious concerns raised over council-owned firm failing to carry out audit

PUBLISHED: 20:50 21 January 2020 | UPDATED: 20:50 21 January 2020

Serious fears have been raised over a council-owned companys failure to comply with auditors instructions, it has emerged. Pictured, the opening of the Passivhaus homes at Rayne Park, Bowthorpe. Photo: Denise Bradley

Serious fears have been raised over a council-owned companys failure to comply with auditors instructions, it has emerged. Pictured, the opening of the Passivhaus homes at Rayne Park, Bowthorpe. Photo: Denise Bradley

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Serious fears have been raised over a council-owned company's failure to comply with auditors' instructions, it has emerged.

Ben Price, city councillor for Thorpe Hamlet and chair of the audit committee. Picture: Norwich GreensBen Price, city councillor for Thorpe Hamlet and chair of the audit committee. Picture: Norwich Greens

Norwich Regeneration Limited (NRL), a property development firm owned by the city council, was asked by the authority's auditors to hold an independent review into itself.

But the company, which was loaned £11.4m by the city council in December 2019, failed to comply with the request and has also not implemented recommendations made in a recent review.

And now Ben Price, chairman of the council's audit committee, has expressed fears over the implications for the authority.

READ MORE: Behind closed doors deal to lend £11.4m for new homes on edge of city

Speaking at an audit committee meeting held on Tuesday, January 21, he said: "That's something I feel very strongly about. That is a serious comment there. This is all my fears incarnated on the page."

A report from the council's internal auditors, LGSS, stated: "[We] have not had any assurance that the recommendations made following the NRL review have been fully implemented. There has been no confirmation that arrangements for an independent internal audit of the company has have been made.

"The council has no reliable assurance that outcomes expected are being achieved nor any assurance that governance within the company is in line with that expected by the council."

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"[We] were not asked to review or challenge the revised business case relating to the council's relationship with this company."

And the report said oversight of NRL was a "significant risk".

Mr Price, Green councillor for Thorpe Hamlet added: "We need to have that independent audit.

"We need to know [what happens] with the business we own and are liable for. We don't know if we're getting value for money. We wouldn't run any other part of the council like that."

Chief financial officer Hannah Simpson said the city council had £6.4m invested in NRL.

READ MORE: Behind closed doors deal to lend £11.4m for new homes on edge of city

And Neil Hunter, head of internal audit, added: "Somebody should be making sure that your money is being spent with the same assurances as at the council.

"Within the council, there are procedures to ensure that people are paid the right amount. NRL should have processes to ensure it is spending its money properly."

But Anton Bull, director of resources and NRL board member, said a conversation about "what an internal audit of NRL would look like" would be needed.

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