William Eichler 11 April 2019

Scottish councils lose over £120m due to ‘weak’ financial controls

Systems to prevent public money being lost to mistakes and fraud in local government ‘may be under strain’, Audit Scotland has warned.

A new report by the Accounts Commission has found ‘recurring weaknesses’ in the financial safeguards used by Scottish local authorities.

It said these weaknesses were apparent in information processing, reviews, and separating council employees' duties in order to prevent fraud.

The net revenue expenditure of Scottish councils totalled £12.4bn in 2017/18.

The auditors said that if financial controls were improved, then councils could save £124m of public money. They would also limit reputational damage.

‘Robust management and scrutiny of the finances at Scotland's councils is more important now than ever before,’ said Graham Sharp, chair of the Accounts Commission.

‘Councils face complex and challenging financial pressures, and rising demand for services. At the same time, budgets are tightening and there is significant uncertainty from factors such as the UK's withdrawal from the EU.

‘There are many examples that the systems for managing finances in Scotland's councils are working effectively.

‘However, councillors are ultimately responsible for scrutinising a council's use of public money, and they should seek assurances from council officers that rigorous systems and processes are in place to safeguard finances.’

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