Council’s financial risk rating downgraded over ‘outstanding’ NRL issues
PUBLISHED: 06:08 15 July 2020
A Norfolk council has had its risk rating downgraded after auditors found “outstanding” issues with a housing firm it owns.
Norwich City Council hasreceived a ‘satisfactory’ internal audit rating, a step down from last year’s ‘good’.
Local authorities must undergo financial and governance health checks to ensure accounts are stable and the council is well-run.
But following reports that the council’s own housing company, Norwich Regeneration Ltd (NRL) had failed to comply with auditors instructions, it emerged that the firm was unable to repay a £6m loan to the authority, as it had lost the cash after selling homes for less than it cost to build them.
And now a report on the council’s annual internal audit process has revealed that issues with NRL have seen the council’s overall risk rating downgraded due to concerns over the company.
The report stated: “There are outstanding significant recommendations from the work undertaken by internal audit relating to the council’s wholly owned company, Norwich Regeneration Ltd, and contract management in the council.”
Auditors have not received “assurance from management that all of the recommendations made following the review of NRL have been fully implemented”.
You may also want to watch:
The review was reported to the audit committee in March 2019.
And the report said there was “no confirmation arrangements for an independent internal audit of the company have been made”.
It continued: “Without these key recommendations implemented the council has no reliable assurance that outcomes expected of the company are being achieved, nor any assurance that those governance arrangements and practices operating within the company are in line with those expected by the council.”
It recommended “governance arrangements of this partnership should be the subject of a full audit during 2020-2021”.
Audit committee chairman Ben Price said: “It is disappointing we have outstanding risks from the work around whistleblowing in NRL from well over a year ago.”
But Gavin Jones, audit manager, said: “I’m led to believe we’re expecting a response pretty much now from NRL.”
And chief finance officer Hannah Simpson added: “We’ve been through the process of appointing non-executive directors to the board and I think that will be really helpful to the governance arrangements.”
If you value what this story gives you, please consider supporting the Eastern Daily Press. Click the link in the orange box above for details.