Wednesday 13 July 2011

An audience with the auditors

Mr Reasonable and Mrs Angry have just returned from a long meeting with Paul Hughes, auditor with Grant Thornton for the London Borough of Broken Barnet. It was a very interesting meeting, and, we hope, a constructive one. We are giving Mr Hughes a chance to respond to some of the points we raised with him before writing in detail about it in our blogs, but you may be assured that there will be a full report, as soon as possible, whatever the outcome.

The council offices at North London Business Park are not the most attractive of venues: an ugly collection of corporate buildings and multi storey car parks sat in the middle of nowhere, with a couple of lakes surrounded by goose shit. No sign of Mrs Angry's eco friendly One Barnet sewage recycling plan, as offered to the marvellous Ideasbarnet website last year, she noted, with regret.

As Mrs Angry waited outside for Mr Reasonable, the Director of Corporate Governance, who is a great admirer of Mrs Angry, walked past in horror, barely able to mutter a reluctant hello when he clocked her hanging about. She smiled horribly in return, and wished him good morning. Mr Hughes, who had not been warned in advance of his audience with the she devil, also walked past in bemusement, but Mrs Angry stared ahead tactfully into the mid distance, trying to assume the expression of someone about to attend a meeting about the finer points of an local authority audit and who had suddenly acquired a wealth of expertise on accountancy, public sector finance, corporate law, that sort of stuff. Hold on, though, thought Mrs Angry: I am that woman now. Well kind of.

Mr Reasonable arrived, and a short discussion of the meeting's agenda ensued. You be bad cop, and I'll be good cop, suggested Mrs Angry. Mr Reasonable and Mrs Angry looked at each other uneasily. No, said Mrs Angry, that isn't going to work, is it? In the end they decided on a two handed approach - a double act, and Mrs Angry tried to behave. Always difficult.

Meetings in NLBP are rather uncomfortable as you will notice, when you sit down, that there are locks on the outside of the doors. Throughout the meeting with the auditors, therefore, Mrs Angry had to fight the urge to turn around to see if the Director of Corporate Governance had appeared behind her and was twitching the handle in an anti clockwise direction ...

As we settled down around the table, the assistant auditor noted the peculiar colour of the windows: a strange colour, she said: tinted. Ah, said Mrs Angry, thinking back to a remark by Brian Coleman's at last night's council meeting. Yes, she said: rosy tinted, I would imagine.

The next hour and a quarter was spent in discussion of some very serious issues relating to the audit, MetPro, and the wider implications.

We would like to believe that Mr Hughes will reflect on the concerns we raised, and take action to address these concerns. So much is at stake, at this crucial point in the preparation for the massive outsourcing programme of One Barnet.

And it is not just the future financial well being of our borough which hangs in the balance: our situation here demonstrates a test of the government's plans for the future of the audit process itself.

What will happen now here in Barnet will be an indication of our borough's competence in local governance, but it will also be a challenge for Mr Pickles' plans for the audit of local authorities, and a system that will place a reliance on the small and rather incestuous group of private sector audit companies who are expected to take over the work of the Audit Commission when it is abolished. If confidence in the integrity of the audit process is to remain after the loss of the Audit Commission, the private companies that take its place must be shown to have the ability and independence that are required for the job.

At one point in this morning's meeting Mr Hughes commented ruefully that he had heard from Mr Pickles, last week. Yes, said Mrs Angry, trying to keep a straight face. So had she ...

Well, we armchair auditors have done our best, here in Broken Barnet, but Uncle Eric can't really think that the investigations of ordinary residents and bloggers could or should ever be expected to replace a rigorous, professional system of scrutiny of local authority spending. All we can do, really, is keep a watchful eye on the watchmen.

What happens now is a test of Barnet's Tory leadership, and will reveal whether or not Richard Cornelius is capable of putting the well being of the residents of this borough before the discredited political ideology of his predecessors.

It is also a test of Grant Thornton, and their credibility as an effective, independent auditor, able and willing to address what is, whether they like it or not, a matter of serious public concern. To refuse a further inquiry into the implications of the MetPro audit on the grounds of the danger of 'undermining confidence in a public body' is not acceptable. Barnet's reputation is already in tatters, and its financial administration is in meltdown. To proceed any further with large scale outsourcing now would be complete madness.

Last year Grant Thornton identified huge flaws in the One Barnet business plan, or lack of it, and commented that Barnet did not seem to understand the process of risk management. Post MetPro, and all the areas of incompetence that have consequently been revealed, it is surely apparent that these flaws are far more serious than was first suspected. One Barnet is sick: One Barnet is dying - time to put it an end to it and start again.

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