Tees Valley Combined Authority Faces Major Financial Audit Concerns Ahead of Audit & Governance Meeting
- teessidetoday
- Nov 22
- 5 min read
Tees Valley Combined Authority faces prospect of a Second Controversial Best Value Notice being slapped on it, as the Audit Failures continue to mount.
22nd November 2025
The Tees Valley Combined Authority (TVCA) faces yet another wave of serious financial and governance concerns, as the organisation of public concerns Audit & Governance Committee prepares to meet on the 27 November 2025, with documents released for the meeting & seen by The Teesside & Durham Post paint an ever increasing 'bleak picture' of an institution still struggling to regain control of its finances, its governance, and its most importantly of all..... its reputation.
For residents across the Tees Valley, the report is likely to raise alarming questions about how public money has been handled — and whether the TVCA is now capable of turning the corner after years of mismanagement, opaque decision-making, and repeated warnings from auditors, Government and oversight bodies that it must "Get it house in order!"...
External Auditors Set to Issue a “Disclaimed Opinion”: A Damning Statement of Failure....
One of the most serious matters placed before the Committee is the External Audit Update, confirming that TVCA’s auditors, Ernst & Young (EY), intend to issue whats known as a disclaimed audit opinion on the 2024/25 financial statements.
A disclaimed opinion is extremely rare, and is effectively the auditor saying:
“We cannot give any assurance that the accounts are accurate, complete, or reliable.”
This is the lowest possible level of assurance and is normally only issued when:
records are missing,
key transactions cannot be verified,
management cannot provide sufficient evidence, or
fundamental controls have simply collapsed.
According to the papers, auditors Ernst & Young have now stopped substantive audit work due to “material matters” that TVCA still has not resolved. These issues affect not only the 2024/25 accounts but also the previous year’s accounts (2023/24) — which still have not been signed off...
The new Interim Group Director of Finance admits that they cannot sign off the prior years’ accounts as “true and fair” without further work, with some transactions being “quite complex” and outside the normal scope of a combined authority, with significant technical advice and extra staffing now required just to get the books into a state fit for signing.
This means TVCA is now working against a statutory Government backstop date of the 27 February 2026 before further intervention is made.
Accounting Problems Reportedly Linked to
Development Corporations and Complex Transactions
According to the audit papers seen by The Teesside & Durham Post this week, many of the problem transactions relate to Mayoral Development Corporations (MDCs), which have been at the centre of financial controversy in the Tees Valley for years, with officials admitting that the complexity of these transactions means they must “do their due diligence” to establish whether public accounting standards have been correctly applied, with the problems reportedly stemming from decisions and transactions that predate the current finance leadership. Its also claimed some of the transactions have already been brought to the Committee previously — meaning concerns may have been known but not acted upon.
In short, its claimed the TVCA cannot currently say, with confidence, that previous financial decisions were lawful, properly accounted for, or even made in the public interest.
Governance Failures: Best Value Notice
Confirmed Deep Systemic Weaknesses
The Best Value Notice (BVN), issued against the TVCA earlier this year, identified widespread governance weaknesses — and those issues now clearly still unresolved.
The Best Value Notice was said to have highlighted, weak financial controls, inadequate governance and scrutiny, a lack of transparency, poor record-keeping, unclear accountability between the Mayor, Cabinet and officers, & opaque and inconsistent decision-making.
The audit papers repeatedly reference the Best Value Notice, demonstrating that TVCA remains in a period of a deep governance crisis, & forced to adopt multiple emergency improvement measures with the likelihood of the TVCA having the BVN lifted looking increasingly unlikely...
Internal Audit Raises Further Red Flags
Internal Auditors, have also reportedly identified multiple high-risk areas requiring urgent review in 2025/26, including:
Creditor payments (risk of incorrect or unauthorised spending),
Procurement compliance with the new Procurement Act 2023,
Income and debtors (risk of lost or uncollected income),
Subsidiary oversight – Teesside Airport, a chronic area of mismanagement,
External grants (significant risk due to volume of money and poor controls).
They are also conducting advisory work in:
Anti-Fraud controls, prompted by concerns about internal fraud risks,
Whistleblowing culture, assessing whether staff feel safe to speak up.
The fact that this advisory work is necessary — especially around whistleblowing — suggests the TVCA is dealing with deep-rooted cultural problems within the organisation, with those seeing whats going on around them 'too scared' to speak out !
TVCA Still Cannot Hold a Quorate Meeting
A governance body that cannot even convene is, by definition, broken.
Its claimed a previous meeting on the 18th September 2025 had to be opened and immediately adjourned because TVCA could not secure a quorum. This is yet another embarrassing symptom of an organisation whose oversight structures have decayed.
During that non-quorate meeting, members were only able to hold informal discussions — meaning no decisions could legally be made.
Key Decision-Making Rules Found to Be Inadequate
The Monitoring Officer has found that TVCA’s Constitution: lacks a clear financial threshold for what counts as a “key decision”, allows decisions involving large sums of money to be made without proper scrutiny, & is out of step with all other major combined authorities. The TVCA is said to be proposing a £500,000 key decision threshold — but only now, years late and after multiple governance scandals.
Assurance Framework Must Be Torn Up and Rebuilt
The papers confirm the existing Assurance Framework — the rules governing how TVCA approves and manages public spending — is:
outdated
inconsistent
not compliant with national standards
not fit to support devolved powers
lacking proper political oversight
unable to ensure value for money
TVCA is being forced to develop a full Single Assurance Framework by 2026 to meet just the minimum standards expected of a legally established combined authority.
Public Engagement and Transparency Problems Continue
The documents also reveal the TVCA has "an extremely high number of Freedom of Information (FOI) requests", with a heavy concentration of FOIs submitted by a small number of individuals. The TVCA is now said to be considering adopting a Public Code of Conduct to manage what they claim to be “unreasonable behaviour” from the public, however critics argue the significant FOI requests are the only avenue available to them to bring transparency to an organisation which is operating almost completely clandestinely, with the fact that the TVCA is needing to implement a Public Code of Conduct underscoring the tensions between the authority and residents seeking transparency.
A Combined Authority in Serious Trouble,
But is it big enough to Bring Down its Mayor ?
The financial statements audit has exposed deep, systemic problems:
The TVCA cannot produce auditable accounts.
External auditors have lost confidence in the organisation’s ability to demonstrate the accuracy of its finances.
Governance structures have failed.
Controls around public money have failed.
Development Corporation transactions remain a major area of risk.
Staff, culture, transparency and oversight all require urgent reform.
For the people of the Teesside — already frustrated by failed regeneration promises, controversies at Teesside Airport, and opaque decision-making — these reports paint a devastating picture.
The Audit & Governance Committee now faces a stark test:
Will it finally hold the Mayor’s administration and TVCA leadership to account — or will the problems continue to be swept aside?
Should the government bring in Commissioners to run the TVCA in the light of yet another damming Audit Report ?
YES
NO
