Oakham Town Council Audit: 'Administrative Errors' or Systemic Failure?
Oakham Town Councillors are being asked to note the councils external audit report.
An analysis of the external audit report for Oakham Town Council reveals multiple statutory breaches, directly contradicting claims that the failures were merely 'administrative errors' primarily due to staff sickness.
The external audit report issued by Moore for Oakham Town Council for the year ended 31 March 2025, has placed significant focus on the Council's failures in financial governance and regulatory compliance. While the Clerk reportedly described the findings to the full Council as highlighting mainly "administrative errors due to staff sickness," a detailed examination of the official report and accompanying communication, including a powerful letter from Cllr Brookes, suggests a much graver reality: systemic breaches of statutory regulations and proper financial practices.
Statutory Breaches and Governance Failures
The external auditor, Moore, did not mince words, explicitly pointing out failures that are legally required:
Approving the AGAR Out of Order: The Council was found to be in breach of Section 12 of the Audit and Accounts Regulations 2015. This serious breach occurred because the Council approved Section 2 of the Annual Governance and Accountability Return (AGAR) before the Responsible Financial Officer (RFO) had completed it. Proper practice mandates RFO completion prior to Council approval, undermining the governance assurance process.
Failure to Publish Notice of Conclusion of Audit: This is a clear legal contravention of Section 16(1) of the Accounts and Audit Regulations 2015. The council failed to publish this required notice on its website alongside the signed audit report and AGAR, demonstrating a fundamental lapse in transparency and legal compliance.
Inadequate Internal Control: The auditor noted a breach of proper practices concerning bank reconciliations, which were neither signed nor agreed in the minutes. Consequently, the external auditor advised that Assertion 1 on the Annual Governance Statement—which confirms the authority has a sound system of internal control—should have been answered 'No'. This is far from a minor administrative error; it indicates a failure to maintain robust financial oversight.
The Misleading Nature of the "Administrative Errors" Claim
As highlighted in Cllr Brookes' letter to the Council, describing these findings as "mainly administrative" is an oversimplification that risks misleading the public and Council members. The issues go directly to the heart of financial accountability:
Insufficient Explanation for Variances: The Council's explanation for significant financial variances in Box 3 (Other receipts) was deemed by the auditor to be insufficiently detailed and meaningful. This prevented the auditor from confirming the adequacy of the Council's budgeting processes.
Lack of Transparency in Restatement: When correcting prior year figures in the Accounting Statements (Boxes 4 and 6), the Council failed to mark the column as 'Restated'. As Cllr Brookes notes, this "undermines transparency by obscuring the fact that an error was corrected."
Systemic Omissions: The external auditor repeatedly had to request missing information, including the Annual Internal Audit Report, year-end bank reconciliation, a breakdown of reserves, and details regarding significant income. This "repeated failure to submit complete and correct documentation demonstrates systemic issues," according to the critical analysis provided by Cllr Brookes.
The Direct Financial Cost of Failure
The repeated failures and poor submission quality also translated into a tangible financial penalty for the Town Council, an outcome that directly contradicts the notion that the issues were inconsequential.
The external audit invoice confirms significant additional fees levied by Moore:
£1,300.00 for "consideration of points raised to external auditor."
£157.50 for "information omitted from initial submission or supplied with insufficient detail."
These supplementary charges, totalling £1,457.50 on top of the fixed audit fee, represent an unnecessary financial burden on the Council, directly resulting from its failure to adhere to proper procedures and provide adequate documentation promptly.
Questionable Reliance on Staff Sickness
While the Clerk's paper acknowledged that issues were "due to the shortage of staff at a crucial time," Cllr Brookes challenged this justification. In the letter to the Council, Cllr Brookes stated: "I find the excuse of staff absence to be a very poor one. We had a Finance Working Group in place. What oversight and proactive measures were they taking to ensure continuity and compliance, knowing the audit deadline was approaching?"
Indeed, the external audit continuation page included a specific matter for attention recommending that the Council "consider in its Risk Assessment how to mitigate the risk of reduction in staff resource, as demonstrated with the limited access to systems in the clerk's absence."
This highlights that rather than being an acceptable excuse for the failure, the lack of a proper system to handle staff absence is, itself, a governance failing that requires urgent mitigation, not just after the fact explanation.
Conclusion: Call for Systemic Change
The evidence from the audit report and Cllr Brookes' strong commentary paints a picture of a Council struggling with fundamental governance requirements. The issues identified—ranging from breaches of statutory law to an inadequate system of internal control and a lack of financial transparency—cannot be dismissed as minor administrative hiccups. The need for "genuine, systemic change" is clear, and the Council faces an imperative to address its regulatory and governance failings to ensure public confidence and responsible use of taxpayer funds.
Letter Cllr Martin Brookes sent Oakham Town Council:
Dear Oakham Town Council,
I have read the External Audit Report and the Clerk’s paper for the next meeting. I must express my profound disappointment that we are once again presented with a poor audit report. I anticipate sitting in the meeting and being told by the Finance Working Group that this is a "good report," just as we were told regarding the Internal Audit, despite the auditor's clearly contrary opinion. I believe this cycle of minimising serious issues is precisely why we fail to improve.
The assertion that the external audit report only highlights administrative errors is an oversimplification and is potentially misleading. While some issues are administrative, the report from Moore, our external auditor, identifies multiple breaches of statutory regulations and proper practices that raise serious concerns about the Council's financial management and governance.
Breaches of Statutory Regulations and Proper Practices
The audit report explicitly details failures that are more serious than mere administrative slip-ups:
Approving the AGAR Out of Order: The Council breached Section 12 of the Audit and Accounts Regulations 2015 by approving Section 2 of the Annual Governance and Accountability Return (AGAR) before the Responsible Financial Officer (RFO) had completed it. Proper practice requires RFO completion prior to Council approval.
Failure to Publish the Notice of Conclusion of Audit: This is a legal requirement under Section 16(1) of the Accounts and Audit Regulations 2015 that the Council has failed to meet.
Inadequate Internal Control Support: Due to a breach of proper practices—specifically, unsigned bank reconciliations or their non-agreement in the minutes—the external auditor noted that Assertion 1 on the Annual Governance Statement should have been answered 'No'. This directly suggests the Council may not have had a "sound system of internal control."
Failures in Financial Accountability and Transparency
The auditor also raised significant concerns regarding the accuracy and completeness of the financial information provided:
Insufficient Explanation for Significant Variances: The explanation for significant variances in Box 3 (Other receipts) was not deemed sufficiently detailed and meaningful, meaning the auditor was unable to confirm that budgeting processes are adequate.
Failure to Mark Restated Figures: When correcting the prior year’s Accounting Statements, the Council did not mark the column as 'Restated'. This undermines transparency by obscuring the fact that an error was corrected.
Systemic Incomplete Information Submissions: The repeated failure to submit complete and correct documentation demonstrates systemic issues, including initial omission of the Annual Internal Audit Report, missing supporting data (e.g., bank reconciliation, reserve breakdown), and a lack of response to queries regarding significant income. This prevented the auditor from confirming whether the Council actively monitors actual performance against budget.
Seriousness and Financial Implications
Describing these findings as "mainly administrative" downplays their gravity. Breaches of statutory regulations fundamentally undermine the principles of good governance and public accountability.
Furthermore, these repeated failures have a direct financial cost. Moore levied an additional charge of £1,300.00 for "consideration of points raised to external auditor" and a charge of £157.50 for "information omitted from initial submission or supplied with insufficient detail." These unnecessary costs are a direct result of our failure to adhere to proper procedures.
While the Clerk’s paper acknowledges that many issues are "due to the shortage of staff at a crucial time," I find the excuse of staff absence to be a very poor one. We had a Finance Working Group in place. What oversight and proactive measures were they taking to ensure continuity and compliance, knowing the audit deadline was approaching?
I am fed up being told serious, worsening regulatory and governance issues are merely "mainly administrative, and quite often due to the shortage of staff at a crucial time of the financial year," when clearly, they are not. We must stop pretending things are fine and commit to genuine, systemic change.
Regards,
Cllr Martin Brookes
Oakham South
Audit report and covering letter.
Covering letter addressed to Councillor Anna Douthwaite.
During the Clerk's absence, Cllr Douthwaite was appointed Responsible Financial Officer. She also served as the chairman of the now-defunct finance committee. Cllr Douthwaite publicly stated her qualification for the RFO position, citing her previous experience with much larger organizations. Notably, the Auditor incorrectly referred to her as the Clerk.
Our ref: 979/1878288
30 September 2025
Cllr C Douthwaite
Oakham Town Council
Rol House
Long Row
Oakham
LE15 6LN
Dear Clerk
Annual Governance and Accountability Return for the Year ended 31 March 2025
Please find enclosed the signed External Audit Report to accompany your Annual Governance and
Accountability Return for the year ended 31 March 2025.
We also enclose a note of our charges based on the fixed rate audit fee as set by the Smaller
Authorities’ Audit Appointments Ltd.
Authorities who have not claimed exemption
Regulation 13 of the Accounts and Audit Regulations 2015 stipulate that Authorities, who are not
inactive Authorities, must publish the following (including on the Authority’s website):
(a) The audited version(s) of the Statement of Accounts and Annual Governance Statement
(b) The auditor’s certificate and opinion
(c) Any public interest report or other recommendation of the auditor.
(d) A form of Notice of Conclusion of Annual Audit
We draw your attention to the following points.
• Please note than the Annual Internal Audit Report was not sent to us with the initial
submission. Please would you ensure this document is included within the initial submission
going forwards.
• The published Notice of Public Rights requires the name, position and contact details of the
person to contact to exercise public rights to be entered at line 2(b) on the form to satisfy the
Accounts and Audit Regulations 2015, Paragraph 15(2)(b). The name has been missed from
the notice this year. The council should ensure this is completed in the future.
• The council is required to approve Section 1 and 2 of the return individually in a specified
order and the minutes should reflect this. Best practice would be to provide an individual
minute reference or sub-reference for the approval of each section and reflect this reference
on the return so the order of approval is more easily identified.
• Per the internal auditors report, the Internal Auditor answered 'Not covered' to control
objective F which suggests that the council does not operate a petty cash system and so
referencing petty cash on the bank reconciliation seems unnecessary. We would suggest the
reconciliation schedule is updated to remove it if the council do not operate such a system.
We note that this is a repeated point.
• We note that the council did not commence their Public Rights Period until 1st July 2025
which is after the earliest possible period that would satisfy the Audit and Accounts
Regulations 2015. Per the regulations, section 12 (3)(a) and proper practices require that
Partners: Andy Hancock FCCA, Carolyn Rossiter FCA, Mohamed Mavani FCA, Matthew Grief CTA TEP, Nick Bairstow FCA, April Foster FCCA, John Harvey BFP ACA FCCA, Tim
Woodgates CTA FCCA, Jen Nixon FCCA MAAT, Michelle Watson FCCA, Robert Pluck FCCA, Gemma Roger FCA, Amanda Etty FCA.
Associates: Paul Nash FCCA, Lorna Bloor FCCA, Hannah Sardeson FCCA, Ben Higgins FCCA. Registered to carry on audit work in the UK and regulated for a range of investment
business activities; and licensed to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England and Wales.
An independent member firm of Moore Global Network Limited – members in principal cities throughout the world. This firm is not a partner or agent for any other Moore firm and is a
separate partnership with offices in Corby, Peterborough and Northampton.
following approval of the Return, the Public Rights Period should commence as soon as is
reasonably practicable when taking into consideration the mandatory inclusion of the first 10
working days of July. Going forwards, for any delay between the council's approval of the
AGAR and the notice of public rights period chosen, please could you provide us with a
reason why this is the case.
• It was identified on the full internal auditor report, that the internal auditor tested the objectives
required to be considered on the basis of the evidence presented to them, which may imply
not all evidence was available. Whilst we note that it is the Authority's responsibility to set the
parameters under which the Internal Auditor completes their review work, we would expect
this to cover all of the areas required to as part of the internal auditor's scope of work.
• Please note that the council is required under paragraph 1.6 of the Practitioners Guide 2024 to
publish the reasons for a No responses on Section 1 Annual Governance Statement. Whilst
we feel that assertion 7 this year is self explanatory, the council must publish the reasons in
future.
• With regards to payment approval lists within the minutes of council meetings, we would
recommend that the clerk ensures these are as accurate as possible with regards to invoice
numbers, invoice dates etc. The template appears to have space for these items just not
completed.
• Please note that when making amendments to the AGAR following the initial submission, this
should be done by initialling and dating the amendment on the original AGAR provided.
A template Notice of Conclusion of Audit form is available in the useful documents section on our
website using the following link https://www.moore.co.uk/sectors/public-sector/smaller-authorities.
The notice must also state that an elector may inspect those documents at all reasonable times and
without payment. The address and times when this inspection may be carried out must also be given.
Yours sincerely
Moore
Encs.
External Auditor Report and Certificate 2024/25 - Oakham Town Council
The external audit report for the year ended 31 March 2025 by Moore, the External Auditor, indicates a limited assurance opinion with several matters reported, as well as additional matters drawn to the attention of the authority.
Breaches of Proper Practices and Regulations
The auditor reported the following matters that led to a qualified limited assurance opinion:
Failure to Publish Notice of Conclusion of Audit: The authority failed to publish the Notice of Conclusion of Audit on their website alongside the signed external audit report and the audited Annual Governance and Accountability Return (AGAR), which is a requirement under Section 16(1) of the Accounts and Audit Regulations 2015.
Approval of AGAR Out of Order: The Council approved Section 2 of the AGAR before the Responsible Financial Officer (RFO) completed it. This is a breach of Section 12 of the Audit and Accounts Regulations 2015, which requires RFO completion prior to Council approval.
Inadequate Internal Control: The Internal Auditor noted that monthly bank reconciliations had not been signed or referenced as being agreed in the minutes, which is a breach of proper practices. Due to this, the external auditor would have expected
Assertion 1 on the Annual Governance Statement (which confirms a sound system of internal control) to have been answered 'No'.
Insufficient Explanation for Variances: The explanation provided by the council for the significant variances in Box 3 (Other receipts) was not deemed sufficiently detailed and meaningful as required by proper practices. Due to a lack of a breakdown of other income (box 3), the auditor was unable to confirm the adequacy of budgeting processes.
Failure to Mark Restated Figures: Boxes 4 and 6 of the prior year column on the Accounting Statements were restated (to correct pension costs being recorded in the wrong box), but the column was not marked as 'Restated' to bring the correction to the reader's attention.
Other Matters for Attention
The following "Other matters not affecting our opinion" were drawn to the authority's attention:
Inconsistent AGAR Approval Date: The minutes of the meeting where Sections 1 and 2 were approved stated the date was Wednesday 23rd June, while the AGAR recorded the date as 20th June. The 23rd of June was not a Wednesday, leaving the correct approval date unclear.
Incomplete Annual Internal Audit Report (AIAR): The initial AIAR submitted did not have all objectives completed, though a fully completed report was later found on the council's website.
Incomplete Initial AGAR Submission: The initial submission of the AGAR was incomplete, missing the council's website on Section 1 and the Trust Fund disclosures in boxes 11a and 11b. Although later resubmissions addressed these points, they introduced new issues such as electronic signatures and other incomplete fields.
Missing Supporting Data: The council did not provide all requested supporting data for intermediate testing, including a year-end bank reconciliation, explanation of significant variances, breakdown of reserves, and details regarding significant income. This prevented the auditor from confirming whether the council actively monitors actual performance compared to budgeted performance.
Mitigating Staff Absence Risk: The auditor recommended that the council ensure its Risk Assessment includes how to mitigate the risk of reduction in staff resource, as demonstrated by the limited access to systems during the Clerk's absence.
Auditor Certification
The external audit review of Sections 1 and 2 of the AGAR for the year ended 31 March 2025 was completed, and responsibilities under the Local Audit and Accountability Act 2014 were discharged. The External Auditor was
Moore, and the certificate date was 26/09/2025.
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