KPMG and Northamptonshire County Council

16 Jun 19

In a feature article and editorial published online and in the June 2019 edition of Public Finance, we referred to a “litany” of high profile “audit failures” in recent years, including Lehman Brothers and the BHS pension fund.

We also referred to the financial collapse of Northamptonshire County Council (NCC). We now acknowledge that the article could have been interpreted as suggesting that NCC's auditors, KPMG, failed to heed warning signs and that, had they done so, NCC’s collapse could have been averted. It was in fact our intention to highlight the failure of the system to respond appropriately to warning signs identified by the auditor for NCC.

We accept that these inferred criticisms of KPMG were unfounded. We also acknowledge that, far from ignoring NCC’s financial difficulties, KPMG in fact issued and published two adverse value for money opinions, and subsequently issued and published an Advisory Notice – the first in the history of public sector audit.

It was never our intention to suggest that KPMG's audit of NCC, over several years, was not in accordance with the requirements of the Local Audit and Accountability Act 2014 and auditing standards. CIPFA and Public Finance apologise to KPMG and are happy to set the record straight.

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