Helping local government sharpen up their accounts

Public bodies are currently wrestling with having to deliver more – and better – services with ever-decreasing resources.

At the Wales Audit Office, we are encouraging new and innovative approaches as a way for public services to survive these challenging times. But, organisations need to do this alongside maintaining a very sharp focus on effective financial management and corporate governance.

Just this week, we’ve published the third of our annual reports into the state of local government accounts – which includes local councils, police bodies, Fire and Rescue Services, National Parks and Community Councils – and is based on our audit work across Wales.

It’s great to see that overall, the quality and timeliness of local authority accounts are getting better – although there is still room for improvement.

We also found clear lessons that need to be learned around managing levels of reserves wisely, developing better medium-term financial plans and making sure those plans are closely linked to the plans authorities’ have in place for shaping their services in the future.

We’ve said this before. Just a few months ago, the Auditor General issued his stark warning to Town and Community Councils around fundamental issues of weak financial management and governance. His report was published in response to a number of public interest reports that were issued and sadly, there are likely to be more of these to come.

But, we’re not just about pointing the finger. As the public service watchdog, we’re also about promoting improvement and we have a number of practical tools and resources available to help public bodies.

We’ve developed a good practice guide on timely financial reporting, setting out the benefits, challenges and steps that organisations should take to achieve the faster closing of accounts. We’ve also produced a good practice guide specifically to help for community councils manage their money and assets.

Not that long ago we also produced a research paper for Welsh Government on local authority reserves and unsupported borrowing looking at how local government bodies in Wales uses reserves to support their financial strategies.

And, we also have work in the pipeline. For example, we’re examining how effective annual governance statements are within the Welsh local government sector and will publish something later this year on the key learning points and steps audited bodies need to take to ensure their governance reviews are as effective as they could be.

In the next few weeks, we’re also preparing to publish a detailed report into how councils in Wales are responding to the financial pressures they face.

Both of these reports will be made available on our website when published – so keep an eye out.

John HernimanAbout the Author:

John Herniman has worked for the Wales Audit Office and its predecessor organisations since joining District Audit as a trainee in 1987. He is now a Financial Audit Group Director for the local government and criminal justice sectors and manages a varied portfolio of clients throughout Wales.


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