C&AG disclaims audit opinion on Northern Regional College’s 2023-24 Accounts
The Comptroller and Auditor General has today reported significant issues arising from her audit of NRC’s financial statements for 2023-24
The Comptroller and Auditor General (C&AG), Dorinnia Carville, has today reported significant issues arising from her audit of Northern Regional College’s financial statements for 2023-24.
The C&AG has disclaimed her audit opinions on both the truth and fairness of the financial statements and the regularity of transactions. This is because there was insufficient appropriate audit evidence to provide a basis for an audit opinion. A disclaimer of opinion is highly unusual and reflects the seriousness of the issues identified.
Serious weaknesses in financial control and reporting
The audit identified fundamental weaknesses in the College’s financial control environment, alongside significant deficiencies in accounting records and financial reporting processes.
The quality of the financial statements submitted for audit deteriorated significantly compared to the previous year, despite earlier concerns raised by the C&AG. The College produced multiple versions of its financial statements, with eleven iterations required to address a large number of errors. Across these versions, accounting errors with a combined impact of £8.399 million were identified and corrected, while further material errors remained unadjusted.
The report also highlights poor-quality working papers, inadequate explanations for key balances and failures in basic financial controls.
Lack of assurance over significant areas of the accounts
The C&AG was unable to obtain sufficient, appropriate audit evidence for a number of balances with a combined value of over £11 million. These limitations were considered to be both material and pervasive, meaning they could affect the overall reliability of the financial statements.
Adequate accounting records were not maintained and the C&AG did not receive all the information and explanations required to complete the audit.
Impact on the Department for the Economy
The issues identified at Northern Regional College also have implications for the wider Department for the Economy Group. As a significant component of the Departmental Group, the deficiencies in the College’s financial information contributed to a disclaimed audit opinion on the Department’s 2024/25 Group financial statements.
Commenting on her audit findings, Dorinnia Carville said: “It is highly unusual for me to disclaim my audit opinions, and this underlines the significance and severity of the issues identified. Concerns raised in the previous year’s audit have not been addressed and the position has instead deteriorated.
“This audit was completed 19 months beyond the normal reporting deadline as a result of the delay by the College in producing financial statements, the poor quality of those financial statements and the extremely poor quality of available working papers to support the figures.
“Urgent action is required by the College, its Governing Body and the Department for the Economy to address the weaknesses identified. The production of timely, audited financial statements is fundamental to transparency and accountability in how public money is spent.”
The C&AG’s report includes a response from the College acknowledging the findings and noting plans to strengthen financial controls, improve processes and enhance oversight.