AUDITORS have hit a mysterious snag in Herefordshire Council’s finances.

County councillors have raised concerns over the potential reputational damage the audit issue could have on the local authority.

Under the National Audit Office Code of Audit Practice external auditors are required to report if the council has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

But Grant Thornton told this week’s audit and governance committee that they would have to delay their value for money opinion after they were alerted to an unnamed matter arising from an internal audit report.

“This matter is of such potential significance to our work, we have decided to delay issuing our VFM Opinion, until the matter has reached its conclusion,” the report reads.

Committee chairman Nigel Shaw asked if auditors could assure him that the issue referred to a specific matter rather than a systematic problem.

“Absolutely,” replied auditor Jon Roberts.

“I’m hesitant to get drawn further into that.

“I don’t think it’s appropriate for me to get into something that might narrow down the detail of what this matter relates to.”

Councillor Shaw asked him when the matter would likely be resolved and reported to the committee.

“It’s dependent on internal audit completing its work but I imagine it would be ready for the next meeting,” Mr Roberts said.

Coun Shaw said: “I’m concerned about reputational issues and to the wider public it doesn’t look a good thing if we can’t get a resolution to this value for money statement.”

Assistant director of internal audit services SWAP Jacqui Gooding said they were completing the work and that they had identified a potential problem two weeks ago.

Grant Thornton also told the committee they are still being appraised of another matter that is preventing them from issuing the audit certificate for the last two years.

A recent response to a freedom of information request now confirms that the council is withholding information related to this issue because it is data related to a claim that legal professional privilege could be maintained in legal proceedings.

However, council officers say they cannot confirm or deny whether the information relates to an individual, the financial or business affairs of any person nor if it is data relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime.

“Under Section 31 (3) of the Freedom of Information Act (law enforcement) we can neither confirm nor deny that these are applicable reasons or that any such information is held by the council,” the freedom of information response states.

“This is on the basis that confirmation or denial would reveal whether or not such action was being contemplated, and if any investigation were taking place or being contemplated it would be prejudiced by confirmation or denial of these reasons.”