The Liverpool ferry terminal project left Treasury with no choice but to break audit law and consider publishing accounts that would not give a “true and fair view,” the Public Accounts Committee has heard.
Chief Financial Officer Caldric Randall told the hearing that complex asset valuations for the terminal caused a six-month delay in receiving critical financial information.
“That information was very late in arriving to us in the form that we required,” he said.
Mr Randall described the project as “a highly complex and sort of unusual project for us to do.” He added: “We’re not that experienced in having this type of project.”
Regulations
The delays meant Treasury breached Regulation 11 of the Audit Act, which requires accounts to be prepared by July 31.
Mr Randall confirmed no formal direction was issued to extend the deadline. “There was no direction made,” he said, acknowledging the regulation is “almost universally not complied with”.
A breach of Regulation 11 is an offence under Section 21 of the regulations, carrying a fine of up to £5,000.
Mr Randall also apologised for failing to inform the committee as the situation worsened.
“I probably should have written to the committee and informed you of the position and the fact that we were delayed,” he said. “That’s an oversight on my behalf, and I apologise for that.”
Qualified Accounts
The committee heard that Treasury actively considered publishing qualified accounts that auditors would not certify as true and fair.
Mr Randall said: “They would undoubtedly be qualified by the auditor and not give a true and fair view to the public.”
The decision to delay rather than release those accounts was taken by officials. Mr Randall said it was “in the public interest to make sure the accounts are accurate”.
Deputy Chief Financial Officer Sarah De-Yoxall explained that without adjustments related to the terminal, the accounts “would not have reflected a true and fair view of the overall financial position for government as a whole”.
Mr Randall stressed the problems were a “one off thing” related specifically to the ferry terminal. “We do not anticipate these problems occurring next year,” he said.