TVCA accounts are to be disclaimed yet again, in spite of hopes that the organisation would be getting back on track by now.
The confirmation came at TVCA’s audit and governance meeting, held on Thursday September 18. The committee was inquorate due to low attendance, however a meeting was still held on an informal basis. During the discussion, it became clear that work was still ongoing in regards to the accounts from 2023/24. Work on these accounts should have been concluded by the authority and then the auditors by the end of February 2025.
Auditor Ernst & Young (EY) previously sent a letter to TVCA in April this year, highlighting numerous problems caused by the combined authority in relation to the 2023/24 accounts. Three statutory recommendations were made which were “fully” accepted by chief executive Tom Bryant.
Ideally auditors should issue a “clean” opinion on accounts, thereby providing full assurance as to their content and accuracy. But they can also issue a modified opinion or simply disclaim accounts, when there has been insufficient work done to formulate any sort of opinion, the worst case scenario. Auditors still must issue an opinion on whether “value for money” has been achieved.
Not yet back on track
Rather than getting a clean or modified opinion for the 2024/25 accounts, the aim is now to simply try and reach a disclaimed opinion on time. TVCA interim group director of finance and resources, Jo Moore, said: “There will be a disclaimed audit opinion, which is what we’re trying and endeavouring to get to, to meet the statutory backstop date of February 27 next year.”
On a point of clarity, Ms Moore added: “I need to be able to sign both the 2024/25 and the 2023/24 accounts have been true and fair, so that’s sort of irrespective of the auditor’s opinion, I need to sign them first before the auditors will then sign them and give their opinion – there is a chronology to this.”
When asked by a committee member, Ms Moore further clarified that it was her statutory responsibility that the accounts show a “true and fair” view of the financial position, meaning they are free from material error. Ms Moore described it as “unfortunate” that she was having to revisit the 2023/24 accounts, but added: “We are not talking huge amounts of transactions in terms of the material ones, it’s kind of low volume, quite complex transactions.”
Claire Mellons, from EY, voiced hope that the audit would be completed for 2025/26, as had been the original plan for 2024/25. Chair of the committee, Darlington Labour Councillor Mandy Porter described the news of a disclaimed audit opinion for 2024/25 as “disappointing”, adding: “I think we all thought that we’d be back on track… unfortunately we’re not in that position.”
Since the general election in July 2024, an emphasis has been put on playing catch-up with auditing authorities’ accounts across the country, due to a nationwide backlog. In the last 12 months, TVCA’s accounts for 2021/22 and 2022/23 were both disclaimed by former auditor Forvis Mazars.
Now the combined authority sees its accounts checked by EY, who intended to issue a disclaimed opinion for the year 2023/24, although the February 2025 deadline was missed due to TVCA not complying with its statutory reporting obligations. As a result, EY said there would be a “significant delay” in the completion of the 2023/24 audit beyond the statutory backstop of February 28, 2025.
In May this year, it was reported that the delayed completion of the 2023/24 audit has had a knock on effect for 2024/25, with EY saying: “Since concluding our value for money work in relation to our 2023/24 audit in early February 2025, we have sought to engage with the authority on planning for our 2024/25 audit; although we have received only limited engagement with our audit from the authority.”
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