Audit, Inspection and Safety

10.01.19

‘Don’t cry when things go wrong’: NAO finds ‘unacceptable’ levels of financial weakness across public bodies

An “unacceptably high” number of public bodies have significant financial weaknesses and are failing to provide taxpayers with value for money, Whitehall’s spending watchdog has warned.

Of nearly 1,000 councils, NHS, police, and fire bodies examined by the National Audit Office (NAO), 208 (22%) were found to have “significant weaknesses” in their financial health in 2017-18, a figure which is steadily increasing.

Auditors have offered “qualified conclusions,” a judgement that finances are “seriously wrong,” at 8% of local government bodies last year, and at 18% of county or unitary councils.

The spending watchdog said the number of public bodies with “significant weaknesses in their arrangements for delivering value for money for taxpayers is unacceptably high and increasing.”

Its report stated that given increasing financial and demand pressures, local bodies must take prompt and effective action to improve performance and strengthen financial arrangements where issues have been raised.

The auditor warned that the proportion of bodies with insufficient plans or significant weaknesses in their governance is not only too high, but also pose a risk to public money and could undermine confidence in the management of local services.

NHS trusts and CCGs performed even worse than local government, with 38% of NHS bodies producing financial statements that were cause for concern. The NAO’s head, Sir Amyas Morse, stated he was “shocked at the persistent high level of qualified audit report at local public bodies.”

“A qualification is a judgement that something is seriously wrong, but despite these continued warnings, the number of bodies receiving qualifications is trending upwards,” he said. “Let us hear no cries of ‘where were the auditors?’ when things go wrong. The answer will be ‘they did the job, but you weren’t listening.’

“This is not good enough; local bodies need to address their weaknesses, and departments across government should ensure they are challenging local bodies to demonstrate how they are responding.”

 

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