Residents in a tiny community have escaped a bill of up to £500 per household after challenging scores of disputes to the parish council's accounts.

Potto Parish Council, between Northallerton and Stokesley, called a public meeting when it was faced with a series of auditing bills amounting to £39,000 after a local resident challenged the annual accounts over several years. With a population of 297 and only 120 houses in the parish, it meant residents could be facing extra additional council tax bills for hundreds of pounds.

Now the bill has been reduced to £7,476 after appeals by the parish council. A spokesperson for the council said: “Following on from the public meeting to discuss the Public Interest Report produced by our external auditors PKF Littlejohn, one of the main action items was to appeal the contents and the associated costs. This has been a long drawn out process due to the auditors informing us that there was no official appeal process in place.

"We followed our appeal through various levels in the auditor’s organisation and then with the SAAA, Smaller Authorities Audit Appointments, who are appointed by the government to procure and appoint auditors to smaller authorities, and manage the quality of the auditor’s work.

“The SAAA analysed the auditors time spent on considering the objections, which it noted, were lengthy and numerous over a period of years. They also noted the amount of time spent was not unreasonable considering the amount of material submitted by the objector, therefore the auditor charges were deemed reasonable in terms of time taken.

"The SAAA also considered the proportionality issue given the size of the invoices and the annual precept of the parish council. The SAAA therefore has determined a 70 per cent reduction in the auditor invoices given the exceptional circumstances of this case.

"The result is that the costs incurred for the four years from 2017-18 to 2020-21 will be £7,476, this amount is covered by the contingency maintained by the parish council and means that no additional costs will be incurred by residents.

"The parish council continues to work with the PSAA and PKF Littlejohn to resolve the costs for the objections raised for 2016-17."

The spokesperson added that the issue is now being taken up with the National Audit Office in an effort to prevent further costs being incurred over complaints from the same objector.