Issue details

Extension of the contract with PwC (CCS Call Off Contract RM6187 – Management Consultancy Framework to the value of £175k), to a maximum additional value of £50k, for the work to facilitate resolution and correction of the remaining cash reconciliation issues, including investigations of material items and effective handover to officers to ensure new processes are fully tested and effective handover.

The Council’s Contract Procedure Rules permit a waiver for extensions to existing contracts, outside the delegated threshold, under the existing contract terms and conditions where it is not practicable to reprocure.

PwC were appointed under Exec Director delegated authority to support the Council investigate and rectify a number of balance sheet cash balances, identified as part of the detailed balance sheet review, and which have had the potential materially impact on the Council’s financial position. Some of these have arisen from changes in feeder systems to the Council’s general ledger that should have been implemented in conjunction with changes to cash matching and reconciliation processes in the ledger – potentially duplicating perceived income receivable, along with other reconciliation issues which have not been processed properly leading to significant balances increasing on balance sheet suspense and control accounts.

As part of the work some 20,000 unmatched or incorrectly reconciled transactions (valuing over £20m) have been identified and need review and (primarily manual) correction.

This contract award was urgent as there was not sufficient capacity within the Finance Team to identify, investigate and rectify such a large volume of transactions, and correction of all material items is required in order for us to finalise production of the 2022/23 Statement of Accounts, and make significant inroads into completion of the 2023/24 Statement of Accounts, the deadlines for which have been prescribed by Government.

The complexity of some of the issues identified has meant there are still a number of material items to investigate and the contract value is now about to reach its limit. Recognising additional support is still required will take the contract over current contract value.

Reasons for taking decision

There is a statutory requirement to publish backlog Statement of Accounts for those up to 2022/23 by December 2024 and 2023/24 by February 2025.

For financial years 2022/23 and 2023/24 the accounts cannot be finalised without material reconciliations and corrections to the accounts finalised.
The Council received a letter from MHCLG on the 28 October seeking an update position on the accounts for 2021/22 and 2022/23 recognising the requirement to comply with the 30-working day public inspection period prior to issue of the audit opinion.

Finalisation of a comprehensive balance sheet review exercise is also a requirement of MHCLG prior to confirmation of ongoing “Exceptional Financial Support” for Slough through Capitalisation Directions.

The investigations could potentially materially impact on the Councils Comprehensive Income and Expenditure Accounts for the previous two financial years – which will impact on the level of available useable reserves held by the Council, and hence increasing the risk of financial sustainability.