Audit timetable presents “significant challenge” to authorities, says report

Only nine local authorities managed to publish their account by 31 July in 2013/14, raising questions over the ability of councils and auditors to meet a revised timetable, set to become mandatory by 2017/18.
A report published today by the Audit Commission said the new, earlier deadline will “present a significant challenge, particularly given that only 21 principal bodies have managed to publish their audited accounts by 31 July since 2008/09.”
And it added that moving the publication date forward by two months will require a detailed review of the final accounts process and discussions with external auditors to agree suitable procedures.

Commenting on the report, Stephen Sheen, managing director at Ichabod’s Industries, said: “The report talks only of this being a problem for authorities to organise themselves better, but it is a significant issue on the audit side.
“How will the firms be able to cope with the collapsing down of the audit period and still be able to assure authorities that the work is adequately staffed with expert and experienced auditors?
“Section 151 officers should be as much interested in this as to how to shorten their own timetable most effectively.”

The report revealed that in 2013/14, 352 of 356 (99 per cent) councils received an audit opinion on their accounts by the current deadline of 30 September 2014.
In addition, only one public interest report – where serious issues are identified – was issued by auditors during the year under its “council” category – to the Police and Crime Commissioner for Surrey and the Chief Constable for Surrey .
Sheen said the latter figure demonstrates “either a spectacular success for the financial management of local government, which deserves acclaim, or a less than fully effective use of statutory powers by the auditors as agents of the public interest.”
He added: “The commission’s lack of comment on the statistic worries me that the latter is nearer to the truth.”

The commission also voiced concerns that the Local Audit and Accountability Act 2014, which abolishes the watchdog from next year, makes no provision for the future national collation and reporting of the results of the local audit process.
It said that the reports have helped drive up financial reporting performance across local government.
The commission’s controller of audit, Marcine Waterman, said: “The timely presentation of audited accounts with an unqualified audit opinion is fundamental to good governance.
“It indicates that bodies have sound financial management arrangements and is the main way that they account for their use of taxpayer’s money.’
Sheen agreed, but said that there was an opportunity to improve the reports further by including more commentary on how the best performing authorities secured their achievements.
He said: “The way the report is written, improvements of recent years are largely attributable to the commission name and shame policy rather than a growing enthusiasm amongst finance practitioners for better practice.
“With the LGA having more of a role in future reports through the Public Sector Audit Appointments company, thoughts should be now be given to how to make the report a constructive one for practitioners.”

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