Moray councillors were told yesterday that their council is the only one in Scotland with less than five years in its reserve funds.
The councillors had a special meeting to approve the council’s audited accounts for the last financial year.
Audit director Brian Howarth of Audit Scotland said he was satisfied the council’s financial management was ‘quite strong’ due to the accuracy of its budget reporting and the delivery of planned savings, where the council shows a good track record.
He said: “The area I am less positive about is the issue of financial sustainability.
“The council has been using around £5m of reserves each year to balance the financial position.
“You’ve got just over three years left before the general fund is dissipated.
“You’re the only Scottish council with less than five years left in their general fund, so for that reason we are keen to keep an eye on the development of transformational change.
“We recognise transformational change can take time and I would be expressing more concern if period of cover is less than three years, because you need to give yourselves a period of time to instigate the transformational changes necessary to achieve financial balance without using reserves each year.”
Council leader Graham Leadbitter said: “I’m pleased with the acknowledgement that while the reserves are lower than we might like, there is a transformation programme in place.
“We are working through it, and we still have space and time to do that.”
Councillor Frank Brown challenged the amount of money spent on the audit.
He said: “We pay Audit Scotland almost £250,000 for this report to tell us by and large that we manage our money fairly well and everything else we already know.
“I know it’s a government requirement but for a council like ourselves, it’s a big chunk of our budget.
“Perhaps the message could get back that people should start thinking about what it costs the public purse and what it costs the people in Moray to have their services have to be reduced to pay this fee.”
Mr Howarth said the fee was subject to benchmarking and was not unreasonable.
He said: “The fee doesn’t cover just this report, it covers our best value reporting and pays for a share of the national performance report that goes on.
“Where audit costs are driven down as in England, they are finding the quality goes down.”
The councillors approved the audited annual accounts, and without comment, also approved the connected charities audited accounts for last year.
