Public Sector Audit in Northern Ireland

Northern Ireland Audit Office is the auditor of the public sector in Northern Ireland.

Who audits the public sector in Northern Ireland?

The Comptroller and Auditor General for Northern Ireland is head of the Northern Ireland Audit Office and is wholly independent of government. They are the statutory auditor of central government in Northern Ireland, including Departments, non-departmental public bodies, NHS bodies and most government companies.

The Department for Communities in Northern Ireland may, with the consent of the Comptroller and Auditor General, designate a member of Northern Ireland Audit Office staff as the Local Government Auditor. Once designated, they carry out their statutory duties and other responsibilities, and exercise their professional judgement, independently of the Department for Communities and the Comptroller and Auditor General.

The Northern Ireland Audit Office carries out audit work on behalf of the Comptroller and Auditor General for Northern Ireland and the Local Government Auditor. In addition, the Northern Ireland Audit Office contracts out some audit work to private sector firms, but the Comptroller and Auditor General and the Local Government Auditor remain the statutory auditors for these with responsibility for certifying the financial statements.

The UK Comptroller and Auditor General is the statutory auditor of a small number of non-devolved public bodies in Northern Ireland, including the Parades Commission and Food Standards Agency in Northern Ireland. The audit work on these bodies is carried out by the National Audit Office or firms contracted by them.

Public sector financial reporting in Northern Ireland

Northern Ireland government departments, executive agencies and non-departmental public bodies each produce their own set of accounts. The accounts of each government department consolidate the relevant executive agencies. Non-departmental public bodies will be consolidated into the respective department which has lead policy responsibility for the first time in 2022-23.

As in the rest of the United Kingdom, Northern Irish central government and NHS bodies are required to prepare their financial statements under International Financial Reporting Standards, as adapted by HM Treasury’s Financial Reporting Manual.

Local authorities and other local government bodies produce accounts under CIPFA / LASAAC’s Code of Practice on Local Authority Accounting, which is based on International Financial Reporting Standards.

There is not a single consolidated government account for Northern Ireland. However, all Northern Irish government bodies, both central and local government, are included in the UK-wide Whole of Government Accounts, audited by the National Audit Office.

Public sector financial audit in Northern Ireland

As in the rest of the UK, the financial audits of the public sector in Northern Ireland are carried out in accordance with International Standards on Auditing (ISAs) as interpreted for the public sector by Practice Note 10 - the Statement of Recommended Practice on audit in the public sector.

The Comptroller and Auditor General’s opinion includes a regularity opinion over whether income and expenditure has been used, in all material respects, in line with the purposes intended by the Northern Ireland Assembly. The opinions of the Local Government Auditor do not cover regularity as this is not relevant to local government because it is not accountable to the Northern Ireland Assembly.

Wider public sector audit work in Northern Ireland

In line with public sector auditors across the UK, public sector auditors in Northern Ireland conduct a variety of other audit and assurance work:

Value for money audit

These audits involve examining the effectiveness, efficiency and economy of an area of government spending chosen at the discretion of the Comptroller and Auditor General. The resulting reports feature recommendations for improvement and are reported to the Northern Ireland Assembly.

Work on economy, efficiency and effectiveness

The Local Government Auditor has a statutory responsibility to check each body it audits has proper arrangements in place to secure the effectiveness, efficiency and economy of its resources. The Local Government Auditor can also carry out value for money audits in local bodies where they have a statutory authority to undertake such audits.

Improvement audits and special investigations

The Local Government Auditor has a legal responsibility to carry out improvement audits on each council covering whether:

a council has discharged its duties relating to improvement planning, including publishing the required improvement information and complying with guidance from the Department of Communities; and
a council is likely to comply with its statutory requirements to secure continuous improvement in the exercise of its functions.

In addition, the Local Government Auditor can carry out special investigations into a local authority’s compliance with its duties.

Public reporting and quasi-judicial functions

The Local Government Auditor is required to consider issuing reports in the public interest if they become aware of matters that need to be brought to the attention of the public or the audited body. A council in receipt of such a report must hold a public meeting within one month to consider its response to the recommendations. As in the rest of the UK, local electors have the power to object to local government accounts.