A Disaster in the Making.. Audit Chaos and Financial Mismanagement, The Shocking Reality of the Tees Valley Combined Authority...
- teessidetoday
- Feb 25
- 4 min read
Audit Chaos and allegations of 'Financial Mismanagement': The Shocking Reality of the Tees Valley Combined Authority in the latest Audit Report.
25th Feb 2025
The Tees Valley Combined Authority (TVCA) has found itself at the centre of yet another damning audit report which is set to go before a meeting in just days, revealing deep-seated governance failures, financial mismanagement, and an alarming lack of transparency. The latest audit completion report from Ernst & Young LLP is said to expose a catalogue of issues that is likely to 'deeply concern' the taxpayers of Teesside, who fund the Authority’s operations.
Its claimed, for the third consecutive year, the TVCA has failed to produce audited financial statements that meet any basic regulatory standards, with auditors being forced to issue a disclaimed audit opinion for the 2023/24 financial year, meaning auditors were unable to verify whether TVCA’s accounts provide a true and fair view of its financial position—an astonishing failure for an organisation that's handling hundreds of millions of pounds in public funds.
It reportedly follows previously disclaimed audits for 2021/22 and 2022/23, demonstrating a systemic issue within the Combined Authority. Despite receiving clear warnings, The Tees Valley Combined Authority is said to have failed to rectify its financial reporting processes, leaving the public very much in the dark about how their money is being spent.
A Culture of Poor Governance and Mismanagement
The most recent audit report highlights significant weaknesses in the TVCA’s governance, particularly surrounding its transparency, decision-making, and oversight of public funds.
One of the most damning revelations to come from the Tees Valley Review, commissioned after widespread allegations of corruption, wrongdoing, and illegality in the South Tees Development Corporation (STDC) and the Teesworks Joint Venture, was that whilst the review found no direct evidence of corruption, it did however find that major governance failings and a lack of financial oversight were present. The review further found that TVCA’s systems do not provide sufficient transparency and scrutiny over public funds, leading to serious concerns about whether taxpayers are actually receiving value for money. Given that Teesworks is supposed to be a flagship economic project for Teesside, the findings suggest that the TVCA’s handling of major regeneration efforts is often riddled with incompetence and poor accountability.
The Unravelling of Teesworks and Legal Battles
Further highlighting the dysfunctional system at Teesside's Failing Combined Authority, the report notes that a recent legal ruling against South Tees Development Corporation (STDC) has resulted in significant undisclosed financial liability. The ruling, which found in favour of PD Ports in a dispute over access rights to the Teesworks site, means The South Tees Development Corporation must now cover PD Ports legal costs. Yet, as of the date of the report, its claimed the TVCA had failed to account for these costs in its financial statements. This is said to have raised urgent questions over whether the TVCA is deliberately hiding financial risks from the public or simply lacking the competence to maintain complete & proper financial records, with critics claiming either scenario is deeply troubling.
A Finance Team in Crisis
Another key reason for the TVCA’s failings is its said to be its severely under-resourced finance and risk teams. The audit report identified that delays in finalising financial statements were directly linked to the team’s inability to cope with workload demands.
Astonishingly, the TVCA only published its draft 2023/24 financial statements on 29 September 2024—nearly four months late. This meant that the statutory public inspection period, which allows residents to scrutinise TVCA’s accounts, did not meet legal requirements.
Moreover, the Authority then failed to publish its Annual Governance Statement alongside the accounts, a legal requirement designed to ensure transparency. Despite auditors raising this issue in December 2024, TVCA has still not taken corrective action, meaning the audit process remains incomplete.
Internal Audit Failures and Accountability Black Holes
To make matters worse, The TVCA’s own internal audit process has collapsed under the weight of these governance failures, where its claimed In 2023/24, none of the seven planned internal audits were completed on time, with Six of those audits delayed until 2024/25, and one was postponed indefinitely & Internal auditors citing severe capacity constraints within the TVCA’s risk and assurance team, which was simultaneously dealing with the Tees Valley Review fallout.
Given these delays, auditors claim its next to impossible to have confidence in TVCA’s ability to manage risk or prevent financial mismanagement within its organisation . With the report explicitly stating that the TVCA did not have proper arrangements in place to secure economy, efficiency, and effectiveness in its use of resources.
Last Chance Saloon for TVCA?
Auditors are now said to have made three urgent recommendations, all of which expose TVCA’s chronic failings:
AN Immediate Review of Finance and Risk Capacity – TVCA must increase staffing in these departments to ensure financial statements are accurate and delivered on time.
Overhaul of Public Inspection Processes – The Authority must comply with legal requirements for financial transparency, including the timely publication of accounts.
Full Implementation of the Tees Valley Review Action Plan – TVCA must follow through on governance reforms to ensure greater scrutiny over public spending.
The Bottom Line: Is this an organisation riddled in corruption ?
This latest audit report reinforces the growing perception that the Tees Valley Combined Authority is failing in its duty to local taxpayers. Year after year, its financial statements are said to be simply 'unfit for purpose', its governance, even to this day seemingly remains shrouded in secrecy, and its most high-profile projects are embroiled in legal disputes and controversy.
While Mayor Ben Houchen and TVCA officials continue to promote 'grand economic visions' for Teesside, the reality is far bleaker: an Authority that can't even keep its own books in order. With residents of Teesside deserving much better than this continued cycle of mismanagement and audit failures.
If TVCA cannot implement the changes demanded by its auditors, then serious questions must be asked about whether its leadership is fit to govern at all.
Does there need to be a full independent inquiry into the financial operations of the Tees Valley Combined Authority ?
YES
NO
