Source · Select Committees · Public Accounts Committee
Recommendation 16
16
The Department agreed with Sir Tony’s assessment that local authorities’ audited accounts were hard reading,...
Conclusion
The Department agreed with Sir Tony’s assessment that local authorities’ audited accounts were hard reading, and with his proposal for a summary statement in plain English. The Department had asked CIPFA to look at simplifying local authority accounts.40 This included examining the issues behind the growth in the length of statutory accounts and the scope to simplify the code of accounting practice. The Department also wanted the new system leader to look at whether it could reduce some of the accounting and audit requirements for local authorities, where they related to areas of less risk.41 The Department’s new arrangements for local government audits
Government Response
Not Addressed
HM Government
Not Addressed
The government agrees with the Committee’s recommendation. Target implementation date: September 2021 6.2 The government agrees and is clear that local accountability must be at the heart of local government financial reporting. To deliver on this work will require a collaborative effort across the local audit system. The department is currently developing a plan to deliver Sir 25 Tony Redmond’s recommendation for each authority to prepare a standardised statement to be presented alongside the statutory accounts with the aim of providing greater transparency of financial reporting. 6.3 In its Spring Update 2021, the department also set out its intention to work with stakeholders to identify opportunities to reduce some of the accounting and audit requirements where these relate to areas of less risk to local bodies. This includes working with CIPFA to progress their project to improve the presentation of local authority accounts with the short term aims to review the statutory disclosures and materiality and the longer term review of the more complex disclosures that increase the time to prepare for- and audit in- the statement of accounts. 6.4 The Local Audit Liaison Committee that is now in place to cover the transition period until the new local audit system leader is established at ARGA and will provide a strategic steer to drive progress of the proposed changes aimed at improving the understanding and accountability of local authority reporting. MHCLG is happy to write to the Committee in September 2021 with a plan for how work will be progressed.