Recommendations & Conclusions
6 items
11
Recommendation
First Report - Financial Reporting and …
Rejected
Through coordination with the Chartered Institute of Public Finance and Accountancy, the Department for Levelling Up, Housing and Communities must make the Accounting Code freely available to all possible users of local authority accounts before the next accounts production cycle for the year ended 31 March 2024. Once this has …
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Through coordination with the Chartered Institute of Public Finance and Accountancy, the Department for Levelling Up, Housing and Communities must make the Accounting Code freely available to all possible users of local authority accounts before the next accounts production cycle for the year ended 31 March 2024. Once this has been achieved, the Department should set out its assessment of what else it can do to encourage the use of the Accounting Code as a central, authoritative, and accessible document that meets the needs of all possible users of local authority accounts.
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Government response AI summary
The government states the Accounting Code is produced by an independent body (CIPFA) and local bodies receive funding for compliance. It does not commit to making the Code freely available by the recommended deadline of March 2024, but will consider what else can be done …
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Ministry of Housing, Communities and Local Government
12
Conclusion
First Report - Financial Reporting and …
Rejected
Within the broader rationale for the local authority accounting and audit systems, the purposes of local audit specifically are: • to establish the credibility of the local authority accounts, so that they can fulfil their purposes in supporting local accountability; and • to supplement the local authority accounts with relevant …
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Within the broader rationale for the local authority accounting and audit systems, the purposes of local audit specifically are: • to establish the credibility of the local authority accounts, so that they can fulfil their purposes in supporting local accountability; and • to supplement the local authority accounts with relevant information and conclusions that are needed to fulfil the purposes of the audited accounts, but that are not part of the disclosures in the accounts. (Paragraph 60) The current audit crisis
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Government response AI summary
The government explicitly rejects the Committee's stated purposes for local audit, arguing that auditors are not equipped to comment on value for money and that such an expectation would hinder efforts to clear the audit backlog. It points to Oflog's role in informing citizens about …
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Ministry of Housing, Communities and Local Government
20
Recommendation
First Report - Financial Reporting and …
Rejected
The Government must reconsider its plan to combine the local audit system leader with the new audit regulator, ARGA. Specifically, the Government must, in coordination with the FRC, which currently has shadow system leader responsibility, introduce legislation to create a new body to manage, oversee and regulate local audit in …
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The Government must reconsider its plan to combine the local audit system leader with the new audit regulator, ARGA. Specifically, the Government must, in coordination with the FRC, which currently has shadow system leader responsibility, introduce legislation to create a new body to manage, oversee and regulate local audit in line with the recommendations put forward by the Redmond Review. The new body must be sponsored by, and directly accountable to, the Department for Levelling Up, Housing and Communities. The legislation to establish this body should be introduced as soon as possible in the 2023–24 session of Parliament.
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Government response AI summary
The government rejects the recommendation to create a new, separate body for local audit, stating a new arm's length body is not necessary and that ARGA's full establishment is dependent on parliamentary time, while a shadow system leader function is already active within the FRC.
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Ministry of Housing, Communities and Local Government
21
Recommendation
First Report - Financial Reporting and …
Rejected
The Department must ensure that the local audit system leader is the primary point of contact to which local auditors can escalate matters of concern that they find during an audit of a local authority. Additionally, the local audit system leader must be responsible for collecting and considering audit findings …
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The Department must ensure that the local audit system leader is the primary point of contact to which local auditors can escalate matters of concern that they find during an audit of a local authority. Additionally, the local audit system leader must be responsible for collecting and considering audit findings across the sector to identify and coordinate responses to systemic or widespread issues that the auditors have found. Furthermore, the Department must clearly set out which body has these responsibilities until the audit system leader is established in legislation. (Paragraph 94) Producing local authority accounts
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Government response AI summary
The government states it is not envisaged that the local audit system leader will be the primary point of contact for auditors' escalations or coordinate responses to systemic issues. It notes existing reporting mechanisms to the Secretary of State and DLUHC, and that the FRC …
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Ministry of Housing, Communities and Local Government
28
Conclusion
First Report - Financial Reporting and …
Rejected
Local auditors are good at establishing the credibility of the accounts under audit. However, while recent changes to the Audit Code have made improvements to the commentary around value for money, many stakeholders want an opinion from the auditors over whether their local authority has achieved value for money for …
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Local auditors are good at establishing the credibility of the accounts under audit. However, while recent changes to the Audit Code have made improvements to the commentary around value for money, many stakeholders want an opinion from the auditors over whether their local authority has achieved value for money for its services.
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Government response AI summary
The government rejects the idea of auditors providing a value for money opinion on services, stating this responsibility lies with democratically elected leaders, and such a requirement would place significant, unequipped demands on the current audit system.
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Ministry of Housing, Communities and Local Government
29
Recommendation
First Report - Financial Reporting and …
Rejected
The Department should work with the organisation that prepares the Audit Code (currently the National Audit Office, eventually the system leader) to ensure that local auditors’ opinions over value for money include an actual assessment of value for money achieved, not merely whether appropriate arrangements exist. Such assessments of value …
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The Department should work with the organisation that prepares the Audit Code (currently the National Audit Office, eventually the system leader) to ensure that local auditors’ opinions over value for money include an actual assessment of value for money achieved, not merely whether appropriate arrangements exist. Such assessments of value for money achieved should cover specific services, projects or programmes, not necessarily to the activity of the entire local authority. These services, projects or programmes would be determined by, for example, local councillors or the auditors. This would allow a greater focus on areas of risk and provide actual assurance over the performance of the authority in key areas.
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Government response AI summary
The government rejects the recommendation, arguing that ensuring value for money is the responsibility of local leaders, that auditors lack the resources and expertise for such specific assessments, and that it would hinder efforts to clear the audit backlog. They highlight the role of the …
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Ministry of Housing, Communities and Local Government