Recommendation 7

We asked the Department to explain the causes of delays to audit firms’ audits of local authorities, given these had begun before the impact of COVID-19. The Department indicated that there was no single cause for the delays in completing audits of local authorities from 2018–19 onwards, and that a variety of factors had been responsible.13 Staff in the finance function of local authorities and audit staff had been required to perform additional work in response to increasing requirements from regulators. The Financial Reporting Council (FRC) had increased its expectations of audits following high profile corporate failures, such as Carillion. As a result, audit firms had faced a significant increase in work in completing local authority audits, such as on asset and 6 C&AG’s Report, Figure 2 and para 9 7 C&AG’s Report, Figure 3 8 Q 15 evidence session of 20 May 2021 9 C&AG’s report, para 2.9 10 Q 17 evidence session of 20 May 2021 11 London Borough of Hackney submission paras 5 and 6 12 Centre of Public Accountability, Durham University submission, page 1 13 Q 13 evidence session of 20 May 2021 Local auditor reporting on local government in England 11 pension valuations, and audit staff had also been reliant on receiving timely responses from valuers.14 The Department considered that these changes were factors in delaying audit completions.15