Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Accepted
This problem is expected to escalate further as the Treasury look towards the 2020– 21...
Conclusion
This problem is expected to escalate further as the Treasury look towards the 2020– 21 WGA. The proportion of 2020–21 Local Government audits that had been completed by the target date of 20 September 2021 dropped again from 45% in 2019–20 to just 9%.43 In advance of the 2020–21 WGA the Treasury told us that it has lifted the audit threshold for Local Government to match the Central Government threshold. It informed us that, as a result, only 10 Local Authorities will sit above this threshold which demands their accounts be subject to a statutory audit.44 Although this will make it easier for the Treasury to produce the WGA on time, it may have negative consequences for the quality and reliability of data unless the Treasury undertake additional assurance work to mitigate this risk.45 41 Q 16 42 WGA 2019–20, para 14, p 212 43 PSAA, News Release: 2020/21 audited accounts 44 Q 17 45 WGA 2019–20, para 14, p 212 14 Whole of Government Accounts 2019–20 2 Quality and consistency of data and reporting Usability of the WGA
Government Response Summary
The government agrees with the recommendation to ensure the data in OSCAR II will remain of sufficient quality. They state WGA data submissions are prepared based on component entity’s audited accounts where published, and entities above a certain size are also required to have their WGA data submission audited. The Treasury will centrally carry out assurance work over data submissions that are below the audit threshold.
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.