Europe’s largest local authority faces a $15.58 million (£12 million) bill for manually auditing accounts which should have been supported by an Oracle ERP systems installed in April 2022.

The £3.2 billion ($4.1 billion) budget authority has become infamous for its ERP project disaster, which has seen its switch from legacy SAP software to cloud-based Oracle Fusion, a customer win co-founder and CTO Larry Ellison once flaunted to investors.

The delayed project left the council without auditable accounts, and without security features, along with costs climbing from around £20 million to as much as £131 million. The IT problems contributed to the Birmingham City Council becoming effectively bankrupt in September last year.

A report from external auditors stated the council will not have a fully functioning cash system until April next year, three years after it went live on an Oracle ERP, and will have to wait until September 2025 for a fully functioning finance system.

Yesterday, Mark Stocks, head of public sector practice at external auditors Grant Thornton, told councillors that officials had told him the new accounting “out-of-the-box” system might not be ready until March 2026, nearly four years after the failing customized system first went live.

The lack of a functioning accounting system was making it costly and time consuming to produce a full audit, the auditors concluded after exploratory work.

“Our ability to get through those two audits —22/23 and 23/24 — and give you the surety that you would normally expect is severely limited now, because of the ERP system and because of the timetables that we’re likely to be working to,” he said.

He told the Council’s audit committee that producing manual audits for these years would be a mammoth task.

“The audits would take a minimum of a year for a full team, full time [to complete] and I would have thought they would run into probably £3 million per audit, and you would have to match that with investment in your finance staff. It’s an enormous undertaking to actually do those audits without an IT control environment and without a business process environment,” he said.

Even if the external auditors did the work, there was no guarantee they could sign off the books with an unqualified opinion.

“There’s a there’s a significant likelihood that we can do all that work, and you could still end up with a disclaimed opinion. It’s a risk, and I am cautious about spending your public money in this way to end up in the same position,” he said.

Problems with the customized ERP system were multiple, but cash management, bank reconciliation and accounts receivable were of particular concern. The council has bought third-party software — CivicaPay/Civica Income Management — as the replacement for the banking system.

Stocks said officials had been working hard to improve the current Oracle system, and said he did not “lose that message.”

Nonetheless, serious issues continue. “You’re not going to have a fully functioning finance system and cash system [until] April next year. The actual financial ledger could be April 2026. That’s really difficult from a finance officer point of view [and] it’s particularly difficult from an external audit point of view to draw a conclusion on your accounts,” he said.

Committee member Richard Parkin said the assessment was “sobering.”

Google offered European cloud firms a $512 million package to stop CISPE from settling its antitrust case against Microsoft, just days before the deal was announced.

According to documents seen by Bloomberg, the package included around $15 million in cash, as well as roughly $495 million worth of software licenses for Google’s cloud products over the next five years.

The deal was intended to lock the group into continuing their legal challenge against Microsoft, but appears the members opted against Google’s lucrative offer in favor of a series of concessions made by Microsoft.

The Cloud Infrastructure Services Providers in Europe (CISPE), a non-profit trade association for cloud providers, had originally lodged a complaint with the EU’s antitrust branch accusing Microsoft of anticompetitive software licensing practices.

The case alleged that Microsoft had acted illegally by making it harder for customers to change their cloud providers by tying its business software to its Azure cloud services platform.

Google was not alone in its attempts to try and derail the settlement. AWS is reported to have made around $6.5 million in financial contributions to the proposal.

When asked about its attempt to stymie Microsoft’s settlement, a spokesperson for Google Cloud said:

Troubled Birmingham City Council, which was declared effectively bankrupt last year owing in part to a disastrous Oracle implementation, has awarded the tech giant £10 million ($12.8 million) for additional professional services.

In a contract award notice published late last week, the council said the deal – worth £9.987 million – started on June 4 and is set to end on September 3, 2026.

Birmingham City Council, Europe’s largest local authority, failed to enter the new financial year in April with auditable accounting software after a disastrous implementation of Oracle Fusion, which went live nearly two years late and pushed the budget from £20 million ($26 million) to £40 million ($51 million).

The total cost of the project could now be as high as £131 million ($163 million) as it plans to completely reimplement the software “out-of-the-box” after efforts to build a customized solution hit the buffers.

The council initially failed to implement security and audit features in the software, meaning that it has no way of telling if fraud took place between April 2022 and September 2023.

A number of companies have benefited from advisory roles in helping the council recover the project. They include Oracle Consulting, Gartner, PwC, and KPMG, as well as original partners Insight Direct and Evosys.

In addition to the new Oracle Professional Services award, there is more work on the way for the tech sector as the council prepares to reimplement Oracle while it also struggles to get the current system fit for purpose.

The council is set to launch a procurement for a new Oracle delivery partner to “scale, deploy and work with the Council to implement the initial solution by March 2026 and run the service for a further three to five years.”

In May, the council’s Finance and Resources committee heard the plan to reimplement Oracle would require significant business change. The committee was assured the council would use “stage gates” to control the rollout and that “there was a tighter governance process in place this time.”