Alison Ring, ICAEW’s public sector director, comments on the financial reporting updates (PES 2022 (01) & FReM), stating: “We welcome the desire to return to pre-COVID reporting and audit cycles, yet timeliness is only one factor to consider. Transparency and being able to hold the government to account also matters, especially in light of extreme COVID-19-related expenditure and increased levels of fraud and error, and so the quality of the reporting must not diminish in the pursuit of timeliness.”

Changes to reporting requirements for 2021/22

As part of the route back to ‘normal’, the previous relaxations to reporting have now been revoked, these include:

• Option for reduced performance reporting has been withdrawn
• Return to 30 June administrative deadline, applications for extension considered only on an exceptional basis
• IFRS 16 Leases will be effective from April 2022

New reporting requirements in 2021/22

Some new reporting requirements have come in midway through the year following Public Accounts Committee recommendations, for a complete list follow the link here. Unsurprisingly they centre on COVID-19 and include:

• Enhanced reporting for fraud, error and debt in respect of COVID-19 support schemes administered:
  1) an evidence-based estimate of the level of fraud and error;
  2) identified risks of fraud and error;
  3) an explanation of how the risks are being managed;
  4) report on year end debt levels and how these are expected to evolve over the life of the scheme as a result of fraud and error; and
  5) comparative analysis where possible.
• New section on discounting where the annual report should explain the impact, show undiscounted values and explain how the rate was determined.
• New fair pay disclosures to align with changes made to the Companies Act. That is to disclose percentage change in remuneration of the highest paid director and the percentage change in remuneration for employees as a whole. There are further disclosures required around the ratios of pay between the highest paid director and employees whose remuneration is on the 25th and 75th percentile of the entity’s employees’ remuneration. More information on this can be found in chapter 6 of the FReM.
• Single Departmental Plans have been withdrawn and replaced with Outcome Delivery Plans (ODPs) and departments now need to report against their priority outcomes and strategic enablers contained within their ODPs and which were agreed at the Spending Review 2020.

Continue to report on…

• EU Exit and COVID-19 spending, including COVID-19 support schemes and staff redeployment.
• Sustainability reporting – for which the guidance was updated in November. The updated guidance includes new reporting requirements for international air travel and ultra-low emission vehicles as well as updates to existing requirements such as rural proofing.