By james art 
The Birmingham Municipal Council is “unlikely” to have a fully functioning financial system by 2026, according to a public interest report of auditors Grant Thornton.
The report, published yesterday, examined the application of the IT system Oracle, which was introduced in April 2020.
The auditors identified “basic weaknesses” in managing the management and management of the Oracle system programs, which “were never effectively removed” and deteriorated by high staff turnover in both senior and operational roles.
The report notes that the risks associated with living with Oracle in April 2020 were not properly understood at that time.
Leadership changes and impact
After the introduction of the system, Birmingham has experienced a number of changes to leadership. Chris Nailer became the temporary executive director in April 2020, succeeding in dawn by Bacsendale. Later, however, he was replaced by Grame Bets, the then director of the Adult Social Services Council, who temporarily took on the role while Deborah Kadman inherited him.
Initially, G -Ja Kadman was a temporary executive director before being appointed permanently in July 2022. She was replaced by Joan Ronnie, who held the position of managing director in June 2024.
In September 2023, Birmingham issued a notice in Section 114, and yesterday’s report states that the failure of the Oracle system is a “factor of contribution” to the inability of the Council to provide its budget and savings programs of 2022-23 and 2023-24.
The 2024-25 budget revealed significant omissions of 164 million pounds for 2023-24 and 2024-25, led by increased demand for services, especially in social care and housing, and failure to deliver savings.
Despite these financial challenges, the report came to the conclusion that if the Oracle system was effectively implemented, Birmingham would have “more capacity and ability to manage these issues”.
System damage and costs
The main disadvantages in the Oracle system included its inability to produce reliable financial statements or to represent money and income without “significant manual contribution” by the financial team. In addition, the system failed to maintain critical processes such as delivery of savings and debt restoration.
The report also stressed that due to unsuccessful implementation, Birmingham will have to invest at least 90 million pounds more than the original budget to adjust the system. These additional costs contributed to the “breakdown of financial control”, preventing the council from properly managing its finances in 2022-23, 2023-24 and 2024-25.
The auditors noted that senior employees and employees of the suppliers were confronted with “potentially controversial priorities” in order to maintain themselves within the budget, avoid additional delays and protect reputation. This led to a “optimism bias” and a tendency to report only the “good news” that Grant Thornton offered contributed to the lack of transparency and unwillingness to challenge.
The report states: “In our opinion, the Council Management arrangements do not adequately support the good management of the program. They did not provide effective supervision and challenge for sufficient identification and risk management.”
It also came to the conclusion that the program led employees do not assume “effective property” and are too relying on external contractors for both management and implementation of the program, which limits the ability of the Council to manage the risks effectively and to retain knowledge S
A spokesman for Birmingham said the report created “difficult reading”, but that the council would “take on board all findings.”
They added: “We are making significant progress in repairing the Oracle system and returning our finances.
The report will be discussed at a Council meeting on March 11.