Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Acknowledged
Quickly clearing local audit backlog risks qualified opinions and lost public assurance
Conclusion
We asked the Treasury what it could do to address the audit backlog in the local government sector more quickly. The Treasury stated that it expected the clearance of the local audit backlog to take several years. The C&AG noted that the work that the Treasury and the NAO were doing could clear the backlog much faster, but that this would be at the expense of a large number of qualified and disclaimed audit opinions, the price of which would be lost assurance over public spending. He explained that returning to unqualified audit opinions within local government would take longer owing to the need to close the gap between “accepted accounting and audit practice in that sector and what is now required by auditing standards and accounting standards”. The Treasury recognised that it needed to strike a balance between the risks posed by getting the timeliness of accounts back on track.34
Government Response Summary
The government states it agrees and has implemented the recommendation, noting it wrote to the Committee in March 2024 to update on its senior-level engagement and discussions with stakeholders about options for clearing the local audit backlog.
Government Response
Acknowledged
HM Government
Acknowledged
3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 HM Treasury wrote to the Committee at the beginning of March 2024, providing an update on how the department is engaging at a senior level with the other relevant stakeholders on this matter. This includes regular engagement and attendance at meetings with stakeholders across the sector, which have involved detailed and technical discussion about the options for clearing the local audit backlog.