Recommendations & Conclusions
5 items
10
Conclusion
First Report - Financial Reporting and …
Acknowledged
The Code of Practice on Local Authority Accounting (the Accounting Code) is a statutorily recommended guidance document for preparing and understanding local authority accounts, but it is too expensive to be accessed by all possible users of the accounts. If made accessible, it could also serve to keep the agreed …
Government response. The government acknowledges it may be beneficial to consider how to encourage the use of the Accounting Code and will consider this alongside CIPFA as they reform financial reporting, but does not commit to making the Code freely available.
Ministry of Housing, Communities and Local Government
13
Conclusion
First Report - Financial Reporting and …
Acknowledged
The local audit system is currently in an unacceptable crisis which requires significant and urgent attention. The most significant symptom of the crisis is an extensive backlog of incomplete audits and unaudited accounts, some of them many years out of date. This has led to a deleterious cycle in which …
Government response. The government acknowledges the unprecedented audit backlog, stating that a consultation on proposals to clear it will begin in early February. They are working with system partners on a solution and will provide updates on progress.
Ministry of Housing, Communities and Local Government
14
Conclusion
First Report - Financial Reporting and …
Acknowledged
The Department has proposed a series of actions to clear the audit backlog, which include resetting the system through a limited series of statutory deadlines for the delivery of outstanding audits from previous financial years. These proposals represent a necessary first step towards overcoming the audit crisis. However, more work …
Government response. The government acknowledges the need for action to clear the audit backlog and states that a consultation on their proposals will begin in early February, emphasizing that this has involved detailed and complex work with system partners.
Ministry of Housing, Communities and Local Government
18
Conclusion
First Report - Financial Reporting and …
Acknowledged
The Redmond and Kingman Reviews stated that a local audit system leader should be a new standalone organisation, but the Government has decided to combine it with the separate audit regulator which is currently the Financial Reporting Council (FRC) but will eventually be the Audit Reporting and Governance Authority (ARGA).
Government response. The government acknowledges the conclusion, confirming their decision to appoint a system leader from within the current system (FRC, transitioning to ARGA) rather than creating a new standalone body, explaining that this policy was subject to public consultation.
Ministry of Housing, Communities and Local Government
31
Recommendation
First Report - Financial Reporting and …
Acknowledged
The Department should work with the organisation that prepares the Audit Code (which is currently the National Audit Office but will be the system leader) to introduce new guidance for the auditors of local authorities in order to encourage them to make more proactive use of their existing powers to …
Government response. The government agrees with the importance of auditors using their powers and will work with the NAO and FRC to consider the merits of introducing new guidance. However, it does not commit to introducing the guidance or assessing its effect.
Ministry of Housing, Communities and Local Government