Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Accepted
The Treasury explained that the decision was made to prepare the WGA using unaudited data...
Recommendation
The Treasury explained that the decision was made to prepare the WGA using unaudited data from these bodies as a trade-off between timeliness and completeness. The Treasury told us that it waited for the audits of all the largest bodies that feed into the WGA to be complete but decided that it was of higher priority to reach publication than to 31 WGA 2019–20, para 11, p 211 32 Q 8 33 Q 9 34 Q 6 35 Q 10 36 WGA 2019–20, para 17c, p 217 37 Public Sector Audit Appointments, News release: 2020/21 audited accounts – PSAA, 12 October 2021 38 Q 25 39 WGA 2019–20, para 8, p 210–11 40 HM Treasury, Annex 2: Entities that are not consolidated in the WGA, 6 June 2022 Whole of Government Accounts 2019–20 13 wait for all smaller bodies to submit audited data. The Treasury also stated that it felt it was preferable to include the unverified data rather than exclude those Local Authorities whose audits were incomplete so as to produce a set of accounts which contained comparable information year on year, rather than a fluctuating set depending on the completion of audits.41 As a result, however, this data, used to reflect the Local Government sector and to prepare the WGA, has become increasingly unreliable. This consequently lowers the quality of data and reduces the certainty of any consequent insights, conclusions or decisions taken from the accounts.42
Government Response Summary
The government agrees to ensure the data in OSCAR II will remain of sufficient quality by centrally carrying out assurance work over data submissions that are below the audit threshold and by obtaining further specialist assurance advice on how to enhance the efficiency and effectiveness of the assurance procedures for WGA.
Government Response
Accepted
HM Government
Accepted
3. PAC conclusion: Failures in the local audit market in England and Wales are resulting in poorer quality data for Central Government to use in oversight, and in preparing the Whole of Government Accounts. 3. PAC recommendation: The Treasury should set out how it will ensure the data in OSCAR II will remain of sufficient quality, despite significantly reducing the level of auditor assurances, for producing the WGA and informing its understanding of the local government sector. 3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 WGA data submissions are prepared based on the component entity’s audited accounts where published. As an additional layer of assurance, entities above a certain size are also required to have their WGA data submission audited. The threshold for this additional data submission audit is periodically reassessed to ensure it remains appropriate. A range of different thresholds were considered for WGA 2020-21, taking into consideration the potential impact on data quality. 3.3 To further enhance the level of assurance over OSCAR II data, the Treasury will centrally carry out assurance work over data submissions that are below the audit threshold (across all sectors). The methodology for this work has been discussed with the National Audit Office. In addition, the department is obtaining further specialist assurance advice on how to enhance the efficiency and effectiveness of the assurance procedures for WGA, to support both this year’s account and future cycles.