Financial watchdogs have slammed Birmingham City Council for failing to produce its annual accounts, in the latest blow to its reputation for financial competence.
The authority admitted it had been forced to delay publication because it does not have an accurate list of what it owns.
By law, all councils are required to publish their annual accounts by September 30.
But the Audit Commission, the official watchdog for public spending, has written to Ministers saying it is “concerned” about the council’s failure to produce accounts - even though it agreed to extend the deadline by two months.
In a letter to John Denham, the Secretary of State for Local Government, Audit Commission Chief Executive Steve Bundred said: “We think it is wholly unacceptable that authorities should not have been able to give an audited account of their stewardship of public money to local taxpayers within this timescale.”
Birmingham City Council confirmed last night that the accounts had still not been published, and said it had been forced to delay them after “some errors and uncertainties were identified in the council’s fixed asset register”. This is a list of assets such as properties and vehicles owned by the authority.
The failure emerged in the House of Commons, where city MP Richard Burden (Lab Northfield) was leading a debate about the authority’s finances.
Local Government Minister Barbara Follett, responding on behalf of the Government, revealed the council’s failure to produce accounts, saying: “Birmingham City Council failed to meet the timetable last year, and its audited accounts for 2008-9 had still not been published by 2008-9.”
She told MPs: “The spend in Birmingham is a mind-boggling £7.5 billion per annum, and we need to keep track of it.”
The revelation raises further questions about the council’s financial position, after it admitted it was on course to go £9. 9million over budget this year.
This will add to the council’s debt, which already stands at a staggering £2.2 billion.
The council has also come under fire over its management of a £155 million fund to cut unemployment, called the Working Neighbourhoods Fund.
The fund, managed by the council-run Be Birmingham partnership, managed to spend little more than a quarter of the available money - and only £2.5 million went directly on worklessness projects, in a city where unemployment in some areas has hit 30 per cent.
Across the country, four councils have failed to present audited accounts and six more, including Bromsgrove Council, presented accounts which auditors had concerns about, said the Audit Commission.
Mr Bundred called on the Local Government Secretary to intervene, saying: “Communities and Local Government can do more to emphasise the importance that you attach to this fundamental aspect of local authorities’ performance.”
Birmingham City Council’s Corporate Director of Resources, Paul Dransfield, said: “We work extremely corroboratively with our external auditor and together we are pursuing excellence in financial management.
“However, during this year’s audit it became clear that our historical asset registers had not been maintained either to my or our auditor’s satisfaction and need improvement.
“We have therefore jointly agreed to extend the audit period to immediately put into place the required changes to improve the accuracy of our balance sheet for 2008/09 and provide a solid base for the 2009/10 audit to be concluded in a timely manner.”