Clackmannanshire Council misses deadline to submit annual accounts for last five years

Clackmannanshire Council has failed to meet the deadline to submit its annual accounts for the last five years, with the latest set being lodged 19 months late.

The situation will be raised at Thursday’s meeting of the Accounts Commission, where members will be told that the local authority’s “continued pattern” of late submission of unaudited accounts and approval of audited accounts needs to be “addressed urgently”.

The report from Audit Scotland’s Controller of Audit, Helena Gray, said there was “significant risk” to the council’s financial governance, its ability to meet statutory obligations, transparency and the reliability of its financial information in supporting informed decision-making and budget setting.

She continued: “Robust and timely information to inform decision making has never been more important with Scottish councils facing unprecedented risks to financial sustainability.

“It is evident that the council has made efforts to address the capacity of its finance team, but this has been challenging given difficult market conditions for recruiting finance professionals.

“The steps the council has taken have not yet had an impact on the council’s ability to approve and publish its accounts within six months of the year-end.

“It is welcome that the council and audit team are working together to identify lessons to learn and improvements for future years.”

The report explained that audited accounts in 2017/18 and 2018/19 were signed before the September target date.

The following two financial years, the November deadline was missed by more than two years and in 2021/22, they were five months late.

The next year, the deadline was missed by 11 months and then 19 months late for 2023/24.

Ms Gray said auditors have “consistently highlighted concerns” about the council’s finance team capacity over a number of years.

She stated: “These concerns related to management changes affecting capacity, followed by the impact of Covid-19, when the team was stretched responding to pandemic priorities.

“Recent audit reports have also pointed to persistent workload pressures, vacancies and recruitment difficulties, including reliance on individual staff members to cover significant areas of work.

“In the latest AAR, auditors note that these concerns were compounded by long-term absences and other competing pressures, with the team also having to manage key strategic and budget responsibilities alongside the annual accounts and audit process.

“The council acknowledges its ongoing capacity challenges with high absence levels, high staff turnover and difficulties recruiting permanent qualified accountants.

“It has taken steps to address long-term absences through its attendance procedures, and it has continued to try to address vacancies through the use of temporary agency staff and specialist agencies.”

The report raised concerns over the impact of the late reporting.

It added: “With annual accounting information and audit reporting out of date, there is a significant risk to the quality and effectiveness of scrutiny undertaken by the council, as well as to the quality of decision making by officers and elected members.

“A key area of concern is the lack of timely audited accounts at the time of budget setting.

“The council set its 2026/27 budget in February 2026, with the most recent available set of audited accounts being from 2022/23 rather than 2024/25, which would have been the case had statutory deadlines been met.

“Those charged with governance must be confident that they have timely and accurate information on which to base their decisions. This risk is particularly acute given the financial challenges currently facing the local government sector. “

A spokesperson for Clackmannanshire Council said they noted the Section 102 report published by the Accounts Commission.

They added: “We await the commission’s findings and welcome the opportunity to present to the Accounts Commission when it meets to consider the Controller of Audit’s report.”

Following Thursday’s meeting, the Accounts Commission will decide in private what the next steps should be with any determinations likely to be announced in early July.