The Audit Commission today labels 'unacceptable' the time taken by some councils to publish their audited accounts. It names the councils that have 'failed to discharge their financial reporting responsibilities properly'.
Today it publishes three national reports entitled Auditing the Accounts - one each for local authorities, fire and rescue authorities, and police authorities. By law, they must publish their accounts six months after the end of the financial year, but there is no statutory deadline for them to be submitted for auditing.
In an open letter to Secretary of State for Communities and Local Government John Denham MP, the Commission's Chief Executive Steve Bundred says: 'The Audit Commission has been concerned for some time about the quality and timeliness of financial reporting by local government.' He calls on the Minister to set a legal deadline for finance officers to submit draft accounts for audit.
In the letter the Commission names four councils that failed to have their accounts audited by 30 November 2009 and six councils that received a qualified audit opinion.
Steve Bundred adds: 'This is eight months after the end of the financial year to which (the accounts) relate. We think it is unacceptable that authorities should not have been able to give an audited account of their stewardship of public money to local taxpayers within this timescale.'
All fire and rescue and police authorities published their audited accounts by 30 November and none has received a qualified opinion.
Unusually the Commission is issuing reports alongside an open letter to a minister. It says, 'quality of financial governance and leadership is critical to improving financial reporting at local government bodies. The tone from the top sets the overall financial culture of an authority, and members should take a lead in emphasising the importance of timely, high quality financial reporting.'
The letter also highlights the 'unnecessary' delays that can be caused by draft accounts having to be approved by authorities before members are aware of the findings of the audit. This is out of line with procedures elsewhere in the public sector and Steve Bundred says to the Secretary of State: ‘It would be helpful if this requirement could be removed at the earliest opportunity.'
A further 13 authorities that no longer exist after local government reorganisation also either received a qualified audit opinion and/or failed to publish audited accounts by 30 November. But the Commission accepts that, in these cases, there may have been practical problems in preparing the accounts and completing the audit on a timely basis.
On a more positive note, the Commission congratulates five local authorities, two fire and rescue authorities and one police authority that published audited accounts in August and early September. 'Their performance demonstrates what can be achieved when an authority gives financial reporting appropriate priority.'
Steve Bundred calls on John Denham to intervene: 'Communities and Local Government can do more to emphasise the importance that you attach to this fundamental aspect of local authorities’ performance. I hope you will follow up this letter with the authorities concerned.'
In next year's letter and report the Audit Commission will list all those authorities that have failed to publish audited accounts by 31 October.
Notes to editors
Local authorities have a statutory duty to publish their accounts by 30 September, whether they have been audited or not. In the Commission's view, the publication of accounts without an auditor's report on them is worthless. For that reason it encourages auditors to issue their opinions, wherever possible, to enable authorities to publish audited accounts by this date.
For the purposes of this first open letter, and accompanying report, the Audit Commission has taken 30 November as the date by which it considers all authorities should have been able to publish audited accounts.
Full copy of open letter
Further information
Mark Nicholson
Media Relations Manager, Audit Commission Millbank Tower, London SW1P 4HQ
Direct line: 0844 798 2135 / 0207 166 2135 | 24hr Press line 0844 798 2128 | Mobile 07813 038132
Email: m-nicholson@audit-commission.gov.uk