City council may be waking from its Oracle nightmare but the accounting hangover continues

Birmingham City Council, Europe's largest local authority, is set to remain without auditors' assurance on its accounts for at least another financial year due to challenges with its Oracle Fusion system, despite its reimplementation. Grant Thornton, the firm auditing the council, expects to issue disclaimer opinions for the 2025/26, 2026/27, and 2027/28 financial years.

A disclaimer opinion occurs when auditors cannot gather enough evidence to provide an opinion on the financial statements, implying a lack of independence in assuring the reliability of the accounts. The council's transition to the rebuilt Oracle Fusion-based HR and finance system in August was largely successful, according to the auditor's report.

However, the initial implementation in 2022 left the council unable to reconcile its bank accounts or reliably understand its cash position, contributing to a crisis that led to an effective bankruptcy. The total cost of the project, including the reimplementation, is projected to be around £144.4 million, potentially reaching £216 million when accounting for forgone efficiency savings.

While the council has reported no outstanding business-critical or priority level 1 or 2 tickets or issues related to the new Oracle Fusion system, auditors do not anticipate a clean audit opinion until the 2028/29 financial year, nearly a decade after the program began.