External auditors give update on Cambridgeshire and Peterborough Combined Authority
External auditors say they’re concerned pervasive “weaknesses” at the Cambridgeshire and Peterborough Combined Authority (CPCA) could lead to a “significant impact on the quality or effectiveness of services or on its reputation”.
Ernst & Young (EY) provided an update on its ongoing audit of the authority’s finances for the financial year ending March 2022 this month.
In their draft report, they repeated concerns that the CPCA has “insufficient capacity, capability and an inappropriate culture” to function effectively, which could have an effect on its finances and delivery of statutory services.
The reasons for this – as previously communicated to the CPCA in a letter last year – includes “investigations into key individuals in the Mayor’s office” which “raises significant questions on the culture, behaviour and integrity” of these individuals.
Since EY produced their report, a code of conduct hearing has been held at the CPCA during which its leader, Mayor Dr Nik Johnson, was found to have broken rules around civility and bringing his office into disrepute.
But he was cleared of other allegations including bullying – although investigators said that this appears to have “emanated” from another staff member who is no longer employed at the authority.
The Labour leader said he regrets “having been a cause of upset” and offered an unreserved apology to those “I gave reason to complain” after investigators said it was “implausible” he was not aware of his ex-colleague’s behaviour.
Other issues raised by EY included an “increased number of employment related claims against the Authority” and “vacancies in the Authority’s senior management team”.
The CPCA has since appointed a new chief executive, Rob Bridge, who has been in post since June 2023; he replaced interim Gordon Mitchell who in turn replaced Eileen Milner, who resigned from the role in May 2022 after less than a year in post.
EY also identified several errors in the CPCA’s book-keeping, although it “did not identify any significant deficiencies in internal control” and said that it has reported smaller errors than in previous years while the authority remains under enhanced scrutiny.
These included an “unfortunate human error” in which five exit packages for staff weren’t recognised as they fell between financial years and the authority’s net pension fund liability being understated by just over £1m – although this was related to a national issue, auditors said.
Meanwhile, £98m of CPCA money was incorrectly categorised as short term cash equivalents rather than short term investments as staff recorded them based on when they were included on balance sheets rather than when they were acquired. Just over £2m of REFCUS (Revenue Expenditure funded from Capital under Statute) money was also misclassified, auditors say.
These errors ultimately do not, however, affect the CPCA’s overall general fund and members of the authority’s audit committee said they were pleased with the audit’s progress.
They are next due to receive an update on it in January 2024.