Latest Public Sector News

17.01.19

Welsh councils ‘needs to get a grip’ as number of authorities with significant financial weakness rises

“Unacceptable and worrying” levels of financial mismanagement have been found at town and city councils across Wales, as the national auditor general reveals “significant weaknesses” in the auditing processes of the country’s local authorities.

Under half of town and community councils in Wales were found to have serious financial issues – leading to ‘qualified audit opinions’— a number which has doubled in 2017-18.

Auditor general Adrian Crompton said: “Year after year, my auditors are uncovering deficiencies at town and community councils across Wales and the situation is worsening.

“This cannot continue. With rising incomes and increased responsibility, the sector needs to get a grip on financial management, now more than ever. My report needs to be read, digested, and acted upon – so that communities in Wales get the services and the assurance they rightly deserve.”

Local authorities continue to manage increasing sums of public money amid a background of rising demand and funding cuts, but the Welsh Audit Office’s (WAO) report concludes that a significant number of councils fail to comply with their statutory responsibilities when preparing their accounts.

The audit office published a second report into the state of audit arrangements at town and community councils in Wales, once again uncovering serious concerns.

One in ten councils were unable to satisfy auditors that they had internal audit arrangements in place, and one in three made inaccurate audit conclusions.

The Welsh Audit Office said that there had been several cases of councils suffering losses of taxpayer money because of failures in financial management and governance, which could have been avoided with effective internal audit arrangements in place.

Crompton added: “The fact we have uncovered serious weaknesses at town and community councils is both unacceptable and worrying – and it needs to be urgently addressed.”

The Welsh Audit Office’s report comes a week after the National Audit Office found an “unacceptably high” number of public bodies in England with significant financial weaknesses.

The NAO’s head, Sir Amyas Morse, stated he was “shocked at the persistent high level of qualified audit report at local public bodies.”

He added: “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.’”

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