Financial Reporting Council Fines Deloitte £6.05 Million

The Financial Reporting Council fined Deloitte £6.05 million on Thursday for audit failures involving the transport group Go-Ahead Group plc between 2016 and 2020. The regulator determined that Deloitte failed to apply sufficient scrutiny to questionable decisions by Go-Ahead, including the improper retention of more than £30 million in public funds.

Investigations revealed that Go-Ahead subsidiaries London & South Eastern Railway and London & Birmingham Railway moved overpayments from the Department for Transport into profit. Deloitte also failed to properly scrutinize cash flow valuations at Go-Ahead Bayern GmbH, which resulted in a significant restatement of loss-making contract provisions.

The original £11 million fine was reduced because of Deloitte's cooperation and admissions. Along with the financial penalty, Deloitte received a severe reprimand and is required to submit a report on the root causes of these failures to its FRC supervisor.