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FINANCIAL ACCOUNTS OF WELSH COUNCILS AND POLICE BODIES

Huw Vaughan Thomas

Third annual report shows improvements but concerns remain in some areas

The quality of local government financial accounts, submitted each year to the Auditor General for Wales, is generally getting better - and all accounts were submitted by the 30 June deadline. But, while there has been an improvement this financial year, compared to the 2011/12 accounts, for some councils things have got worse - particularly in areas with complex accounting requirements, such as property, plant and equipment.

In his report, the Auditor General urges public bodies to ensure that they have effective financial management arrangements in place- as the challenges will continue during this extended period of austerity. He calls on them to adopt good medium term financial planning models which are linked to, and supported by, robust plans for transforming services.

Today's report into local authority and police body accounts concludes that the police sector coped well with significant changes to their financial reporting responsibilities, which were brought about by new legislation which came into full effect last year - the Police Reform and Social Responsibility Act 2011.This is the first year that both Police and Crime Commissioner's and Chief Constable's were required to prepare separate accounts..

The report also found that, for the majority of local authority and police accounts, amendments were required, following audit. And, of greater concern, was that there was an increase this year in the number of bodies where accounts had to be amended for material items - matters of significance - particularly in the case of accounting for property, plant and equipment.

Also, there were a significant number of local (community) councils receiving qualified opinions (which could mean incomplete accounting or not properly following accounting principles). The returns required from audited bodies to support the national Whole of Government Accounts were also, in most cases, not completed on time. And, while annual governance statements continue to be improved upon, there is still scope for further improvement.

Auditor General for Wales, Huw Vaughan Thomas said today:
"While public bodies are getting better at submitting their accounts on time, and overall the quality seems to be improving, the financial climate makes it even more important for organisations to continue to improve their financial management and governance arrangements. The financial forecasts continue to point to pressures and challenges for the public sector and, in light of the number of public interest reports that have been published in recent years on financial reporting and governance failings, organisations must not lose focus."

http://www.wao.gov.uk/assets/LG_Accounts_Final_English.pdf

Notes

This is the third annual report on local government and policing bodies' accounts.
It summarises the results of auditors' work for 2012-13 at unitary authorities, local government pension funds, Police and Crime Commissioners, Police Constables, Fire and Rescue authorities, National Park authorities and joint committees.
The Wales Audit Office has developed a good practice guide which can help bodies plan for, and deliver, faster closing of their accounts. The guide is written for public bodies and their external auditors, and can be found on our Good Practice Exchange website. It includes guidance and case studies on culture change, planning, working practices during the year, and closing and reporting.
The Auditor General and the auditors he appoints in local government are the independent statutory external auditors of most of the Welsh public sector. They are responsible for the annual audit of the majority of public money spent in Wales, including the £15 billion of funds that are voted on annually by the National Assembly. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £5 billion) and to local government (over £4 billion).
The Wales Audit Office works to promote improvement, so that the people of Wales benefit from well managed, accountable, public services that offer the best possible value for money. It is also committed to identifying and spreading good practice.

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