Levelling Up officials must work closely with the Financial Reporting Council (FRC) and town halls to improve local audit delivery, spending watchdogs have warned.

In a follow-up report published on 25 January, the National Audit Office (NAO) assesses progress made since it reported appallingly low rates of timely audits for 2020-21.

That year, just 9% of local audits were completed on time, despite an extended deadline due to the COVID-19 pandemic. The figure improved only marginally – to 12% – for 2021-22.

The NAO’s latest study reveals that at 30 November 2022, Public Sector Audit Appointments found 632 audit opinions were outstanding for all years.

Spending watchdogs said slow completion rates could not be attributed only to the pandemic, and also reflected long-running problems with local audit – including lack of trained staff at councils and private audit firms, cost pressures and the increasing complexity of local accounts.

The landscape has improved recently, although councils face a 150% average increase in audit fees.

Gareth Davies, head of the NAO, said: ‘The Department for Levelling Up, Housing and Communities must continue working with the FRC and other key stakeholders to secure the timely production of audited accounts. It is essential to transparency that the timeliness of local auditor reporting improves and does so quickly.’

Responding to the NAO’s report, Cllr Pete Marland, chair of the Local Government Association’s (LGA) Resources Board, said: ‘Effective external audit and clear and transparent financial reporting are vital, and councils take them extremely seriously. However, as this report makes clear, local audit is in crisis, which is a serious concern for councils.

‘While it acknowledges some actions have been taken to address this, we support the call for the Government to set out a detailed timetable by which it expects to restore timely audited accounts.’

For more on the subject or audits check out 'PSAA floats auditor of last resort idea'.

This article was originally published by The MJ (£).