Deloitte has been fined £6.05 million over failures in its audits of the transport operator Go-Ahead Group’s financial statements for the five financial years from 2016 to 2020.
The Financial Reporting Council announced the sanctions on Thursday, 8 October, following an investigation into the accounting firm’s work.
The regulator found that Deloitte had failed to challenge Go-Ahead’s wrongful retention of more than £30 million in public money over an extended period.
Fine reduced from £11 million
According to Reuters, the regulator reduced the penalty from £11 million to £6.05 million to reflect Deloitte’s exceptional cooperation and admissions.
The final amount is the penalty imposed on Deloitte for its audit failures. It is separate from the public funds retained by Go-Ahead.
Public money retained by rail businesses
The findings concerned money that should have been returned to the government.
The Independent reported that two Go-Ahead subsidiaries had wrongfully retained public money and that the group had released some of it as profit rather than returning it.
The report said Go-Ahead stopped the practice after government officials discovered it.
The case follows the government’s removal of the Southeastern rail franchise from Go-Ahead’s Govia joint venture in 2021 over a serious breach of trust. The regulator began its investigation the following year.
Regulator criticises scrutiny
Penrose Foss, the FRC’s executive counsel and executive director of investigations and enforcement, criticised Deloitte’s failure to scrutinise questionable decisions and actions adequately.
He said the risk to substantial amounts of taxpayers’ money was particularly troubling and was reflected in the financial sanction.
Deloitte acknowledges shortcomings.
Responding to the findings, a Deloitte spokesperson told Reuters: “We regret that aspects of our audit work did not meet the standards expected.”
The firm said it had learned from the matter and remained committed to improving audit quality.
