‘Urgent action required’ at Northern College over ‘significant deficiencies’

Urgent action must be taken over “significant issues” around financial accounting at the Northern Regional College, the Auditor General has said.

Dorinnia Carville found inadequate accounting records and her office did not receive all the information and explanations required to complete the audit of the college’s financial statements for 2023-24.

In a report issued on Tuesday, Ms Carville said she has taken the “highly unusual” step of disclaiming her audit opinion on both the truth and fairness of the financial statements and the regularity of transactions.

This was due to “insufficient appropriate audit evidence to provide a basis for an audit opinion”.

The report identified fundamental weaknesses in the college’s financial control environment, alongside significant deficiencies in accounting records and financial reporting processes.

It also found that the quality of the financial statements submitted for audit “deteriorated significantly” compared to the previous year, despite earlier concerns raised by the auditor.

It said the college produced multiple versions of its financial statements, with 11 iterations required to address a large number of errors, and across these versions, accounting errors with a combined impact of nearly £8.4 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.

The auditor was also described as having been unable to obtain sufficient, appropriate audit evidence for a number of balances with a combined value of more than £11 million.

Meanwhile, the issues identified at the college were also warned to have implications for the wider Department for the Economy group.

The report found that 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.

Ms Carville said urgent action is needed by the college, its governing body and the Department for the Economy.

“It is highly unusual for me to disclaim my audit opinions, and this underlines the significance and severity of the issues identified,” she said.

“Concerns raised in the previous year’s audit have not been addressed and the position has instead deteriorated.”

She went on: “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.”

A Department for the Economy spokesperson responded, saying: “Financial reporting issues within Northern Regional College highlighted by the comptroller and auditor general (C&AG) are not acceptable and are being addressed.

“The minister moved quickly to strengthen governance, leadership and financial controls at the college to ensure that they have implemented appropriate corrective actions to address these issues and to prevent them from reoccurring.

“To provide effective financial leadership, the department has seconded an experienced public finance professional to Northern Regional College as interim finance director.

“The department has been working closely with Northern Regional College and introduced enhanced oversight and accountability measures to ensure that the college remains on track to bring its financial reporting back to the required standard as soon as possible.”

The spokesperson added: “Heightened accountability measures have been in place and will remain in place until the department and the audit office are assured that the college is reporting to the required standard.”