News release: 2019/20 audited accounts

Audit arrangements in local councils, police, fire and other local government bodies are continuing to exhibit signs of stress and difficulty. In the latest audit round, focusing on 2019/20 financial statements and value for money arrangements, fewer than 50% of bodies’ audits were completed by the revised target of 30 November.

Figures compiled by PSAA, the organisation responsible for appointing auditors to 478 local bodies, reveal that 55% (265) of audit opinions were not issued by 30 November. This is a further deterioration on 2018/19 audits when 43% of opinions (210 out of 486) were delayed beyond the then target timetable of 31 July.

This year’s timetable has been deliberately eased by Ministers in recognition of the underlying pressures on the audit process and the significant added complications arising from the Covid-19 pandemic. The pandemic has posed practical challenges for bodies in producing accounts and working papers, and for auditors to carry out their testing. Both sets of staff have had to work remotely throughout the period, and the second national lockdown came at a critical point in the cycle.

Questions and concerns about the potential implications of the pandemic for some bodies have meant that both finance staff and auditors have needed to pay particular attention to the financial position of each entity. Additionally, following a series of increasingly challenging regulatory reviews, auditors have arguably been more focused than ever on their professional duty to give their opinion only when they are satisfied that they have sufficient assurance.

In September Sir Tony Redmond’s review of local government accounting and auditing arrangements was published. Commissioned by Government, it provided an extensive commentary on the local audit system. A Government response to Sir Tony’s report is expected in the near future.

Tony Crawley, PSAA’s Chief Executive said,

“These latest results are further evidence of the significant challenges facing local audit. The problems are serious and pervasive. As well as causing disruption and inconvenience for organisations grappling with many other challenges, they pose a risk to confidence in the audit process which is a foundation stone of public accountability. We look forward to the Government’s response to the Redmond Report and to working with all parties to implement the urgently needed solutions.”

Notes for editors

  1. PSAA is a not-for-profit company established by the Local Government Association following the closure of the Audit Commission.
  2. The Secretary of State has specified PSAA as an appointing person under provisions of the Local Audit and Accountability Act 2014. PSAA appoints an auditor to relevant principal local government bodies that opt into its national scheme and sets a scale of fees for the work which auditors undertake. Currently 98% (478 out of 487 eligible bodies) of eligible local government and police bodies have opted into PSAA’s arrangements for an initial five year period covering bodies’ accounts to 31 March 2023.
  3. The work that auditors undertake is based on the requirements set out in the Local Audit and Accountability Act 2014 and the Code of Audit Practice published by the National Audit Office. The NAO has issued a new Code that will apply to audits from 2020/21.
  4. More information on PSAA is available from the PSAA website.
  5. Local government bodies in this context includes local authorities, combined authorities, national parks, passenger transport executives, waste authorities, functional bodies and other specified bodies.

For more information please contact Public Sector Audit Appointments Limited

E: [email protected]

W: www.psaa.co.uk