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Council accepts damning report on accounts

COUNCILLORS in Shetland have accepted responsibility for serious shortcomings in the way the local authority’s annual accounts have been prepared, including running an understaffed finance department.

On Tuesday Shetland Islands Council faced a “damning” report from external auditor Carol Hislop, of Audit Scotland, which detailed a long list of failings.

For the fifth consecutive year the accounts are being qualified because they have still not been grouped with those of Shetland Charitable Trust, as demanded by the auditors.

Councillors accepted that despite repeated warnings, the finance department had been left with too few staff to cope with ever more complex accounting rules.

Audit Scotland said it was “unacceptable” that the SIC had submitted accounts that were “incomplete and not compliant with the relevant codes of practice”.

Consultants had to be drafted in to help prepare the accounts for 2010/11 after the early retirement of both head of finance Graham Johnston and financial accountant Derek Hughson on 31 March 2011.

Their absence brought on a hectic two months for finance staff working many hours of overtime to prepare the accounts for this Friday’s deadline.

Acting head of finance Hazel Sutherland explained: “The first set of accounts submitted required considerable amendment to ensure that they were complete and compliant with all the relevant codes.

“This was disappointing and has resulted in additional work for finance staff, external advisers and Audit Scotland.”

Councillors acknowledged that there was “nothing wrong with the accounts” as such, but accepted there were huge “problems with the process” of creating the accounts.

Councillor Josie Simpson said that ever since he had become the local authority’s political leader in March he had been aware that finance was “a very big problem”.

He admitted: “This is a damning report – we have to do everything we can to get out of this.”

Audit and scrutiny committee vice chairman Allison Duncan agreed: “This is a bad indictment on the SIC, I am sad to see this go out to the Shetland public.”

Councillor Caroline Miller added: “It is the council’s fault that we didn’t have the correct resources in place. We have been warned.”

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