SIC finance department struggling to cope with workload, says Johnston

Shetland Islands Council’s finance department may need to consider taking on additional staff members to cope with the extra workload imposed on it by the government, councillors heard on Monday.

Head of finance Graham Johnston held up his hand and accepted the bulk of the new criticisms from Audit Scotland in a report which went before this week’s session of the SIC audit and scrutiny committee.

The final audited version of the 2009/10 books is due to be signed off by the finance watchdog by Thursday this week, but they are set to be qualified for the fifth successive year over the council’s inability to group its accounts with those of Shetland Charitable Trust.

In addition, Audit Scotland’s Carol Hislop said she was concerned at the council leaving it “very late in the day” to provide the information it had requested, leading to a number of councillors questioning whether Mr Johnston’s department needed more staff to help it cope with its workload and meet deadlines.

Mr Johnston said he was confident a further qualification of the accounts, relating to a discrepancy in recognised gains and losses, would be averted. But he did think now might be the time to look at more staff.

“We’ve always run a very lean operation [and] it has served us very well down a great number of years,” he said. “What has changed is that there has been a tidal wave of reform to local government. The challenges are getting bigger and bigger and bigger. [I believe] the time is very much right to have a look at our resources to help cope with the present and future challenges.”

Mr Johnston also pointed to distractions caused by the turmoil which the council faced during former chief executive David Clark’s short tenure.

He said: “I fully recognise there is room for improvement. Over the last 18 months there have been one or two distractions and [I accept that] our eye was perhaps not on that particular ball. Our eye is now very much fixed on getting financial accounting right.”

After the meeting, interim chief executive Alistair Buchan told The Shetland Times that after a “period of turbulence” there would inevitably be “reverberations” and there “may be further problems still to emerge”, but he was determined that any such difficulties would not undermine his efforts to knock the local authority into shape.

Mr Buchan said he had full confidence in Mr Johnston and would be gathering further information over the coming weeks and will look at whether more staff might be required. He said it was “always easy to throw money at a problem” but with resources at a premium the SIC needs to “think about working in different ways”.

A range of issues were raised by the auditors, including the accounting treatment of almost £8 million of capital spending which had not resulted in the creation of an asset. Out of that figure, £3 million went on work on the abandoned plans for a new Anderson High School on the existing Knab site, and a further £2 million on the aborted dream of building a bridge to Bressay.

Councillor Laura Baisley said she had been “a bit surprised” to read the criticism and that her confidence had been “slightly dented”. But she and others made it clear they remained squarely behind the embattled finance chief, with Jonathan Wills applauding his “frankness” over the need to make improvements.