A leading global accountancy body has welcomed UK government proposals to set up a single body responsible for the oversight of audits of English local authorities.
Responding to a government consultation on the future of audit for local authorities, ACCA said the proposal is a welcome return to a more centralised approach.
The consultation from the Ministry of Housing, Communities and Local Government aims to fix ‘the broken local audit system’ by establishing a vision with eight core principles; establishing a statutory and independent Local Audit Office (LAO); and mandating audit committees.
However, ACCA says the proposals are silent on how the LAO will be resourced. Mike Suffield, Director Policy & Insights, ACCA and a former director at the National Audit Office and the Financial Reporting Council, said: ‘ACCA recommends the development and presentation of resourcing plans and an impact assessment as soon as practicable. Without this it is impossible to see how the LAO will work in practice.’
ACCA remains concerned by the lack of skilled personnel and talent pipeline in local government. Glenn Collins, Head of Policy, Technical and Strategic Engagement, ACCA UK said: ‘Capacity challenges in both accounts preparation and audit in local government are long-standing and deep seated. While the consultation document provides a useful starting point to discuss these matters, further detailed work is needed to develop a plan for a sustainable local government finance profession.’
ACCA continues to reiterate the importance of timely and high quality audit of local authority accounts and activities. Late publication of audited local authority accounts undermines transparency, trust and the ability of local taxpayers to hold local entities accountable.
Read the submission here.
Read the government consultation here.
