By Vivienne Russell | 15 December 2011
Local authorities generally coped well with the transition to International Financial Reporting Standards last year but some filed late accounts as a result, the Audit Commission said today.
In Auditing the accounts 2010/11, its annual overview of the quality and timeliness of local government accounts, the commission found that the accounts of 18 of 457 local bodies were still without an auditor’s opinion on October 31, a rise from seven the year before.
The change to IFRS also affected the quality of some accounts, with a ‘significant increase’ in the number of bodies needing to make material adjustments to their accounts following the audit.
But, overall, performance in 2010/11 compared well with the previous year.
Only one council received a qualified opinion and this was on an issue unconnected to IFRS.
Audit Commission chief executive Eugene Sullivan said: ‘The vast majority of local government bodies have maintained their standard of performance on financial reporting for 2010/11.
‘This is notable given the challenge of preparing accounts in accordance with IFRS. In particular, it is commendable that there have been no IFRS-related qualified opinions. Meeting the new requirements was, as expected, a significant challenge and there is still much to do in 2011/12.’
The Audit Commission has also issued two further reports on the accounts of parish councils and internal drainage boards. As these bodies have annual income or expenditure below £6.5m they prepare their accounts in the form of an annual return. However, 14 parish councils have failed to publish an annual return for the past three years or more and two IDBs have failed to publish audited accounts for two or more years.
The Audit Commission said it was concerned about the persistent failures of these bodies to fulfil their financial reporting responsibilities.
Paul Mason, assistant director at CIPFA, said: ‘Implementing IFRS at a time of severe budget reductions has been a huge challenge for local authorities, and so they should be congratulated on managing the transition so well.’
