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

Europe's largest local authority still cannot get auditors to vouch for its books as historic data problems linger

Europe's largest local authority will go at least one more financial year without auditors being able to vouch for its accounts despite finally reimplementing Oracle Fusion.

Grant Thornton expects Birmingham City Council to receive "disclaimer opinions" for 2025/26, 2026/27, and 2027/28 due to problems with historic data. A disclaimer opinion means the auditor cannot obtain enough evidence to express an opinion on the financial statements. It does not mean the council failed to produce accounts, but it leaves stakeholders without independent assurance that those accounts are reliable.

A report from the auditor said the council's transition to a rebuilt Oracle Fusion-based HR and finance system in August had been largely successful. It added that the "reimplementation appears to have been better managed than the original 2022 implementation."

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Council taxpayers might hope so. The first implementation of Oracle Fusion left the council unable to reconcile its bank accounts or reliably understand its cash position, and contributed to the crisis that preceded its effective bankruptcy. The total project, including the reimplementation, is set to cost around £144.4 million against an initial estimate of £20 million. Including forgone efficiency savings, researchers have estimated the cost could reach £216 million.

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Its early performance contrasts sharply with that of the original system, known as 1B, which went live in April 2022.

"There are no outstanding business-critical or priority level 1 or 2 tickets or issues. For context, relating to the old 1B Oracle system in September 2025 there were 311 open tickets and 2 major incidents," the report said.

Nonetheless, the council is not expected to regain a clean audit opinion before 2028/29 – roughly a decade after the Oracle program began. The council picked Oracle Fusion to replace its legacy R/3 SAP system and initially planned to go live in December 2020 for finance and procurement, and in February 2021 for HR and payroll. A 2021 business case subsequently moved both launches to April 2022.

Although the council had planned to implement Oracle "out of the box," it introduced several customizations, including a bank-reconciliation design that failed to function properly. The council struggled to understand its cash position and could not provide auditors with sufficient evidence to verify its accounts. It has spent more than £5 million on manual workarounds. ®