NORTHUMBERLAND County Council has been criticised by its external auditors, who said they would resign from their role following a breakdown in relationship with the council’s management.

Ernst and Young (EY) presented its final audit results report to the council’s audit committee on Wednesday, raising several concerns about the way the council had been run.

The local authority had to delay the final sign-off of its accounts earlier this year while EY looked into whistle-blowing allegations. EY’s report said it did not find evidence to support the allegations.

However, a number of issues were raised which resulted in EY coming to an “adverse Value for Money Conclusion”.

The report raised concerns around the turnover of chief finance officers, with three having been in place since May 2017 and a current vacant position.

It also outlined “potential threats to the independence of the council’s internal audit function”, while the council’s transfer of trade and activities from its subsidiary company Arch Group to new company Advance Northumberland, in November 2018, was also highlighted.

EY said the group structure of Advance Northumberland remained the same as the Arch Group, arguing that changing the company’s name would have achieved the same outcome at a “significantly lower cost”.

But the council’s chief executive Daljit Lally claimed parts of EY’s report were inaccurate and had not been rectified despite requests.

She said: “The report is inconsistent, incoherent and filled with subjective comments.”

Coun. Nick Oliver called it a breakdown of relationship, adding: “I feel like this has been something of a fishing expedition.”

Mrs Lally said the council was limited in what it could do to control staff turnover, but a new chief finance officer was due to begin their duties in December, and she defended the council’s chief internal auditor’s independence within her role. Mrs Lally said the council had proposed to remove EY as its external auditors in April, before this request was put on hold when the alleged whistle-blowing complaints were revealed.

At the meeting, Stephen Reid of EY said the company would be writing to Mrs Lally to state its resignation.

Coun. Ian Swithenbank called it a “disturbing day” for the council. He said: “In my 42 or 43 years here, I have never seen such a disagreement or difference in opinion between the council and its auditors.”