Reports on the results of auditors’ work

Audited accounts are the main way public bodies show accountability for managing public money. Publishing timely audited accounts is a fundamental feature of good governance.

The Audit Commission previously published Auditing the Accounts reports summarising the results of the work of auditors appointed by the Audit Commission at local government and local NHS bodies.

Up to and including the audits of accounts for 2017/18, PSAA has been responsible for delivering statutory functions delegated on a transitional basis by the Secretary of State for Communities and Local Government. Under these arrangements, put in place in 2015, PSAA is responsible for appointing auditors to local government and police bodies and for setting audit fees. Before 1 April 2015, these responsibilities were discharged by the Audit Commission.

In July 2016, the Secretary of State specified PSAA as an appointing person under the Local Audit and Accountability Act 2014. This means that for audits of accounts from 2018/19, PSAA will appoint an auditor to relevant principal local government and police bodies that have chosen to opt into its national auditor appointment scheme.

PSAA reports annually in December on the results of auditors’ work at councils, police bodies, fire and rescue authorities and local government bodies.

Report on the results of auditors’ work 2016/17: Local government bodies

This is the third report on the results of auditors’ work at local government bodies published by PSAA. It summarises the results of auditors’ work at 497 principal bodies and 9,752 small bodies for 2016/17. The report covers the timeliness and quality of financial reporting, auditors’ local value for money work, and the extent to which auditors used their statutory reporting powers.

The timeliness and quality of financial reporting for 2016/17, as reported by auditors, remained broadly consistent with the previous year for both principal and small bodies.

Compared with 2015/16, the number of principal bodies that received an unqualified audit opinion by 31 July showed an encouraging increase. 83 principal bodies (17 per cent) received an unqualified opinion on their accounts by the end of July compared with 49 (10 per cent) for 2015/16. These bodies appear to be well positioned to meet the earlier statutory accounts publication timetable that will apply for 2017/18 accounts.

Less positively, the proportion of principal bodies where the auditor was unable to issue the opinion by 30 September increased compared to 2015/16. Auditors at 92 per cent of councils (331 out of 357) were able to issue the opinion on the accounts by 30 September 2017, compared to 96 per cent for the previous year. This is a disappointing development in the context of the challenging new reporting timetable from 2017/18. All police bodies, 29 out of 30 fire and rescue authorities and all other local government bodies received their audit opinions by 30 September 2017.

For the fourth year in a row there have been no qualified opinions on the accounts issued to date to principal bodies. The number of qualified conclusions on value for money arrangements has remained relatively constant at 7 per cent (30 councils, 2 fire and rescue authorities and 1 other local government body) compared to 8 per cent for 2015/16.

The latest results of auditors’ work on the financial year to 31 March 2017 show a solid position for the majority of principal local government bodies. Generally, high standards of financial reporting are being maintained despite the financial and service delivery challenges currently facing local government.

For small bodies, auditors were able to issue their opinion on the annual return by 30 September 2017 at 97 per cent of parish councils and 98 per cent of internal drainage boards. This is consistent with the previous year. The number of qualified opinions issued to parish councils increased from 14 per cent in 2015/16 to 23 per cent and also increased for internal drainage boards from 4 per cent to 10 per cent.

To accompany the report, PSAA has published a spreadsheet which includes:

  • a list of the qualified 2016/17 opinions for parish councils;
  • a list of the qualified 2016/17 opinions for IDBs;
  • the position at 30 November 2017 for the 333 parish councils and two IDBs where an opinion on the annual return had not been issued by 30 September 2017; and
  • the updated position at 30 November 2017 for the 301 parish councils and two IDB where no opinion had been issued on the 2015/16 annual return by 30 September 2016.

Report on the results of auditors work LG 2016-17

Small body qualified and outstanding opinions 2016-17

PSAA press release – Report on the results of auditors’ work 2016-17 LG bodies

Summary of the results of auditors’ work 2016/17: NHS bodies

PSAA has produced two reports on the results of auditors’ work at NHS bodies, covering the 2014/15 and 2015/16 accounts.  As 2016/17 was the last year for which PSAA was responsible for appointing the external auditors to NHS trusts and CCGs, we have produced a summary of auditors’ work rather than a full report.

The summary covers the results of auditors’ work at 84 NHS trusts and 209 Clinical Commissioning Groups for 2016/17, and covers the timeliness and quality of financial reporting, auditors’ local value for money work, and the extent to which auditors used their statutory reporting powers.

The summary is based on information that appointed auditors are required to report to PSAA about the timeliness of their provision of audit opinions and other outputs from their work.

Summary of the results of auditors’ work at NHS bodies 2016-17

Report on the results of auditors’ work 2015/16: Local government bodies

In December 2015, Public Sector Audit Appointments Limited published its first report on the results of auditors’ work at local government bodies, covering the 2014/15 financial year. This is the second report and summarises the results of auditors’ work at 497 principal bodies and 9,756 small bodies for 2015/16. The report covers the timeliness and quality of financial reporting, auditors’ local value for money work, and the extent to which auditors used their statutory reporting powers.

The timeliness and quality of financial reporting for 2015/16, as reported by auditors, remained broadly consistent with the previous year for both principal and small bodies. The number of principal bodies that received an early unqualified audit opinion (by 31 July) doubled compared with 2014/15. In spite of the challenges they are facing, principal local government bodies are working hard to maintain high standards of financial reporting. The latest results of auditors’ work on the financial year to 31 March 2016 show a good position for the majority of organisations.

Auditors at 341 of 357 councils (96 per cent) were able to issue the opinion on the accounts by 30 September 2016. All police bodies, fire and rescue authorities and other local government bodies received their audit opinion by 30 September 2016. For the third year in a row there have been no qualified opinions on the accounts issued to date to principal bodies. The number of qualified conclusions on value for money arrangements increased slightly from 4 per cent to 6 per cent (27 councils, three police bodies, one fire and rescue authority and one other local government body).

For small bodies, auditors were able to issue their opinion on the annual return by 30 September 2016 at 97 per cent of parish councils and 98 per cent of internal drainage boards (IDBs). This is down from 99 per cent the previous year. The number of qualified opinions issued to parish councils remained consistent with the previous year at 14 per cent, but decreased for IDBs from 7 per cent to 4 per cent.

To accompany the report, PSAA has published a spreadsheet which includes:

  • a list of the qualified 2015/16 opinions for parish councils;
  • a list of the qualified 2015/16 opinions for IDBs;
  • the position at 30 November 2016 for the 301 parish councils and two IDBs where an opinion on the annual return had not been issued by 30 September 2016; and
  • the position at 30 November 2016 for the 58 parish councils and one IDB where no opinion had been issued on the 2014/15 annual return by 30 November 2015.

Report on the results of auditors work LG bodies 2015-16

Small body qualified and outstanding opinions 2015-16

PSAA press release – Report on the results of auditors’ work 2015-16 LG bodies

Report on the results of auditors’ work 2015/16: NHS bodies

This report summarises the results of auditors’ work at 90 NHS trusts and 209 Clinical Commissioning Groups for 2015/16.

The report covers the timeliness and quality of financial reporting, auditors’ local value for money work, and the extent to which auditors used their statutory reporting powers.

Overall, the quality of financial reporting for 2015/16 remained broadly consistent with the previous year, both for NHS trusts and clinical commissioning groups (CCGs), whilst there was an improvement in timeliness.

Auditors continued to report concerns about the financial resilience of NHS trusts. Similarly to 2014/15, over half of NHS trusts received a qualified conclusion on their value for money arrangements and almost a third were referred to the Secretary of State. There was also an increase in the number of CCGs that received a qualified regularity opinion and that were referred to the Secretary of State.

Report on the results of auditors work 2015-16 NHS bodies

Report on the results of auditors’ work 2014/15: Local government bodies

This is the first report for local government bodies published by PSAA, and it summarises the results of auditors’ work at 509 principal bodies and 9,755 small bodies for 2014/15. The report covers the timeliness and quality of financial reporting, auditors’ local value for money work, and the extent to which auditors utilised their statutory reporting powers.

The timeliness and quality of financial reporting for 2014/15 remained broadly consistent with the previous year for both principal and small bodies. Against a background of financial challenges, the sector is clearly working hard to achieve appropriate standards in its stewardship of resources.

Auditors at 97 per cent of principal bodies were able to issue the opinion on the 2014/15 accounts by 30 September 2015, with 23 bodies receiving an unqualified audit opinion by 31 July 2015. For the second year in a row there have been no qualified opinions issued to date to principal bodies. The number of qualified conclusions on value for money arrangements remained consistent with the previous year at 4 per cent.

For small bodies, auditors were able to issue their opinion on the annual return by 30 September 2015 at 99 per cent of parish councils and internal drainage boards. This is consistent with the previous year. The number of qualified opinions issued by 30 September 2015 to parish councils increased from 11 per cent for 2013/14 to 14 per cent for 2014/15, but decreased for internal drainage boards from 16 per cent to 7 per cent.

To accompany the report, PSAA has published a list of the qualified 2014/15 opinions for small bodies. The list identifies those parish councils and internal drainage boards where auditors issued a qualified opinion on the 2014/15 annual return, and whether the opinion was also qualified in either of the previous two years. The list also provides an update on the 99 small bodies where the auditor was not able to issue an opinion on the 2014/15 annual return by 30 September 2015.

Report on the results of auditors work LG 2014-15 20151210 (final)

Qualified and outstanding opinions for small bodies 2014-15 (for publication)

PSAA press release – Report on the results of auditors’ work 2014-15 LG bodies

Report on the results of auditors’ work 2014/15: NHS bodies

This is the first report published by PSAA, which summarises the results of auditors’ work at 99 NHS trusts and 211 Clinical Commissioning Groups for 2014/15.

The report covers the timeliness and quality of financial reporting, auditors’ local value for money work, and the extent to which auditors utilised their statutory reporting powers.

Overall, the timeliness and quality of financial reporting for 2014/15 remained broadly consistent with the previous year for both NHS trusts and CCGs.

However, auditors continued to report an increasing level of concern about the financial resilience of NHS trusts, with the number of non-standard conclusions on value for money arrangements and referrals to the Secretary of State for Health both increasing significantly for the second consecutive year. Just over half of NHS trusts received a qualified conclusion on their value for money arrangements and over a quarter were referred to the Secretary of State.

Report on the results of auditors’ work 2014-15 NHS bodies

PSAA press release – Report on the results of auditors’ work 2014-15 NHS bodies