The long days of summer are coming to an end and local authority finance managers up and down the country are returning to the task of producing a balanced budget. The cost of audit fees will, no doubt, be a hotly contested issue.
However, rather than just focusing on costs, we should start with the purpose of auditing. This is broadly to assure the public that councils spend their funds wisely, collect income due and perform well in delivering their priorities.
There is now strong evidence that local authorities are consistently providing good financial information to support decision-making. They are also using procurement and innovative service models to exceed their efficiency targets.
The Audit Commission in particular should be congratulated for just how well they have ensured that councils have in place the systems to achieve these outcomes. However, instead of responding to good marks by adjusting the grading system, now would be an appropriate time to significantly reduce the level of external auditing required. To make sure that this good work continues, the council’s own management and internal audit functions, along with the local electorate, can take responsibility for overall performance scrutiny.
Headlines about financial mis-statements and irregularities are now extremely rare in relation to local authorities, and audit resources would be better directed to the newly acquired, publicly funded financial institutions.
With income streams significantly curtailed and expenditure already being directed as efficiently as possible, the relative level of audit fees is not sustainable and, based on how councils have performed, is no longer necessary.
Lee Colyer
Head of finance and governance,
Tunbridge Wells Borough Council
