Continuing improvements are evident in the quality and timeliness of annual accounts, but there is scope for some bodies to improve their quality assurance procedures and annual reporting
All 23 of Wales’ central government bodies submitted their accounts to audit on time and generally to a good standard in 2015-16. However in a new report released today, the Auditor General for Wales encourages more organisations to employ accounts disclosure checklists to improve the quality of assurance arrangements.
In the first annual report on the financial statements of central government bodies, eighteen of the 23 central government bodies (78%) were considered to have good quality assurance processes in place but the level of quality assurance arrangements being exercised varied.
The Auditor General is also encouraging more organisations to consider using the accounts disclosure checklist, as only ten of the 23 bodies (43%) are currently employing this method to gain assurance over the quality of accounts and comply with accounting standards.
The Auditor General would also like to see:
- more timely, comprehensive and complete working papers to enable the faster completion of audit work and to avoid increased pressure on audited bodies’ finance teams;
- greater thought given to improving the readability and overall length of annual reports, employing methods such as infographics to make key messages more engaging; and
- evidence of preparation for forthcoming accounting and audit developments, including key changes in IFRS and UK GAAP standards and the introduction of the Well-being of Future Generations (Wales) Act 2015.
Auditor General, Huw Vaughan Thomas said today:
“Central government bodies in Wales provide a vast range of services, and in doing so, spend a significant amount of public money. It is encouraging that improvements in the quality and timeliness of audit accounts have been noted. However there a number of issues that still need to be addressed, to remove pressure and provide greater assurance ahead of significant changes to accounting standards and key developments.”
Notes to editors:
- This is the first annual report on the audits of the financial statements of central government bodies. It summarises the results of audit work for 2015-16 completed at central government bodies (audited bodies) in Wales.
- Central government bodies in Wales provide a vast range of services, and in doing so, spend a significant amount of public money. Like all public bodies, they are required to produce, and have audited, a set of annual financial statements (accounts) to demonstrate and report on the stewardship of the public funds entrusted to them, and they are held accountable for doing so.
- Producing accurate and timely accounts is a significant task but is necessary to demonstrate accountability for the stewardship and governance of public funds. Failing to publish such accounts in a timely manner can reflect badly on the audited body, undermining its financial management and corporate governance arrangements, as well as the overall confidence in the organisation.
- The accounting and governance framework applicable to each central government body will be defined by its legal and regulatory framework. This will dictate the form and content of the financial statements and any other reporting requirements such as their Annual Report, and any deadlines for the audit and publication of these documents.
- The central government sector has faced a number of significant challenges. Most notable is the continued downwards financial pressure on budgets, which alongside the changing legal and regulatory framework (new accounting requirements for charitable bodies, changes to Annual Reporting requirements for non-charitable bodies and the passing of the Well-being of Future Generations Act) keeps pressure on audited bodies to find ways of delivering more with less.
- The Auditor General is the independent statutory external auditor of most of the Welsh public sector. He is responsible for the annual audit of the majority of public money spent in Wales, including the £15 billion of funds that are voted on annually by the National Assembly. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £5 billion) and to local government (over £4 billion).
- The audit independence of the Auditor General is of paramount importance. He is appointed by the Queen, and his audit work is not subject to direction or control by the National Assembly or government.
- The Wales Audit Office (WAO) is a corporate body consisting of a nine member statutory Board which employs staff and provides other resources to the Auditor General, who is also the Board’s Chief Executive and Accounting Officer. The Board monitors and advises the Auditor General with regard to the exercise of his functions.