Key stakeholders in the local audit system must continue their efforts to secure timely publication of audited accounts which are often delayed for multiple reasons, according to a report by a leading firm of accountants.
Published by accounting company Grant Thornton, the report says steps that must be taken include improving systems leadership, holding authorities and auditors to account for their performance, a continued focus on the quality of accounts preparation and audit, and the effective engagement between auditors and audited bodies.
The report, entitled About Time? Exploring the reasons for delayed publication of audited local authority accounts says the extent of delay in publication of audited accounts across the local authority sector is severe and of widespread concern.
Only 12% of audited accounts for 2021/22 were published by the target date of 30 November 2022, according to the report. In December 2022 there were over 600 local audit opinions outstanding.
The firm makes a wide range of recommendations including that temporary flexibility could be introduced into the local audit framework to allow reduced scope audits to be undertaken on backlogged accounts.
This would free up local government for more forward-looking activities with limited detrimental impact on the users of financial statements, the report says.
New investment is needed and the adequacy of in-house financial reporting skills must be kept under review, according to the report, and auditors should be engaged at an early stage where innovative, complex or significant transactions are expected.
The report says: ‘The reasons for the delays, as explored in this report, are multi-faceted. There is no single cause of delay and there are, unfortunately, no quick solutions. It will take time to return to consistently high performance against target publication dates.’
Last week, the Levelling Up, Housing and Communities Committee launched an inquiry into financial reporting and audit in local authorities to ensure that councils are financially sustainable and remain accountable.
