Accounts qualified at a third of town and community councils

5 Feb 2020 - 12:00am

Just 66% of councils met the statutory deadline for publishing their audited accounts

The timescales for councils to publish their accounts are set out in law, and yet only 486 councils (66%) met this deadline in 2019. As at 30 November 2019, while a further 51 audits had been completed, 38 community councils still had not submitted accounts for audit. In addition, the number of qualified audits is still too high at 218 councils. This is according to a report issued today (5 February 2020) by the Auditor General for Wales.

The audit arrangements for community councils are designed to provide local residents with a reasonable level of comfort that public money is being handled effectively. With councils handling more public money than ever, it’s increasingly important that councils follow the process set out in law. However, today’s report shows that the number of councils failing to submit their accounts on time has risen compared to last year. This has led to 218 qualified audit opinions to date, which means 218 councils either failed to comply with their statutory requirements, or mis-stated information in their annual return. While this is less than last year, this number may rise once work on the remaining councils has been completed.

There are circumstances in which issues are of such significance that the Auditor General brings these to the attention of the public. During 2019, twelve such reports were issued in the public interest due to significant failures in the management of public funds by local councils.

Today’s report includes five key points:

  • Community councils are managing more money but there is scope to review services and budgets
  • Only 66% of councils met the statutory deadline for publishing audited accounts
  • The number of qualified audits has fallen but it is still too high at 218 councils
  • Significant problems led to public interest reports being issued on 12 councils
  • The 2019-20 audit is the final audit under current arrangements and council views are being sought on the proposed changes

Auditor General, Adrian Crompton said today:

“Local councils are expected to play an increasingly important role in the delivery of public services and in local communities. While I am delighted to see the positive response from some councils to our recommendations from last year, I am disappointed that some councils still receive qualified opinions for multiple reasons. I recommend that all councils consider the issues raised in this report and reflect on whether any of the issues may apply to them.”

Notes to Editors:

  • There are 735 community and town councils in Wales. As a tier of local government, they are elected bodies, with discretionary powers and rights laid down by Parliament to represent their communities and provide services for them.
  • Public Audit (Wales) Act 2004 requires local councils to make up their accounts to 31 March each year and to have those accounts audited by the Auditor General. The Accounts and Audit (Wales) Regulations 2014 sets out the timetable for the preparation and approval of the annual accounts.
  • The audit process involves a review of the annual accounts and an examination of the council’s financial management and governance arrangements that underpin securing value for money in councils’ use of resources.
  • Auditors issue ‘qualified’ audit opinions when councils fail to comply with their statutory responsibilities or where auditors conclude that the information reported in the annual return is mis-stated.
  • Case studies can be found on pages 15, 16, 30
  • The Auditor General is the independent statutory external auditor of the devolved Welsh public sector. He is responsible for the annual audit of the majority of the 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 £7 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, regarding the exercise of his functions.