Following the publication by the National Audit Office (NAO) of a supplementary guidance note (SGN 04), an ICAEW spokesperson said:
“Despite the loss of backstop legislation, it is absolutely critical that local authorities and audit firms in England stay focused on resolving the local audit crisis, so we are pleased to see that the NAO has issued a supplementary guidance note asking external auditors to continue their work as planned.
“The extensive delays in finalising external audits have left many local authorities in England two or more years behind in publishing their audited financial statements, making it impossible for council leaderships and local authority management teams to be held to account for their financial stewardship of the public resources to which they are entrusted. Given the challenging financial situation facing most councils it is more important than ever to have a robust financial reporting and audit system to protect the public interest.
“The recovery plan is at a critical point with both local authority and other public sector audit timetables tied to the proposed 30 September 2024 backstop date for completing outstanding audits up to the 2022/23 financial year. It is extremely important that local authorities and audit firms stick to their plans, as otherwise we could lose another year before getting local audits back on track.
“Local authorities will need to play their part in ensuring auditors have all the information they need to finalise audits from previous years.
“Achieving this first backstop date is an essential step in a multi-year plan to restore timely financial reporting and auditing to local authorities in England. We hope the next government will prioritise the need to get local audit back on track.”
ENDS
Notes to editors:
- Public Sector Audit Appointments (PSAA) reports that 642 audited financial statements from 2022/23 or prior were outstanding as of 31 March 2024, the point at which local authorities and their auditors should in normal circumstances be starting work on the 2023/24 financial statements. There were 19 (2% of the total) audit opinions yet to be issued for the 2018/19 financial year, 25 (5%) for 2019/20, 73 (15%) for 2020/21, 184 (39%) for 2021/22 and 348 (75%) for 2022/23.
- Our response to the Department for Levelling Up, Housing and Communities (DLUHC) consultation on addressing the local audit crisis can be found here. An article in ICAEW Insights provides additional information.
- Our vision for local audit, published last year, highlights the critical role accountants and auditors play in enhancing transparency and accountability in the public sector and the need for clear accountability, strong financial management, good governance and value for money.
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