08 August 2003
Despite its claims that the public audit model it encourages 'ensures against Enron-style failure', the Audit Commission has again warned public bodies to improve their financial management following an eventful year in the sector.
The local government and NHS spending watchdog published its annual report, complete with an analysis of the strengths of public auditing, on August 6.
The watchdog believes that upholding the 'pivotal' values of public audit in protecting the public purse – such as appointing independent auditors to monitor organisations – has enabled it to expose poor financial practices across local authorities and NHS bodies and to encourage transparent accounting practices elsewhere.
The commission also claims its expanded remit, which allows it to monitor operational aspects of public bodies, has helped improve overall standards.
In its audit study, Stewardship and governance: a review of the work of the Audit Commission, the watchdog claimed its biggest successes over the past year included the introduction of the controversial Comprehensive Performance Assessments, which ranks councils according to strict performance criteria.
Through the CPA, auditors claimed, the commission 'can now provide more support to those [councils] with the weakest scores', raising standards across the board.
Other major successes, it suggested, included a more transparent analysis of NHS expenditure, exposure of 'the failure of shared financial systems' at local health bodies in Bedfordshire, and poor operational practices – such as bullying and mismanagement – at councils such as Lincolnshire.
Consequently, the commission warned the sector it needed to 'continue to improve' and to learn 'tough lessons' about financial controls.
The auditors warned that public bodies must 'better integrate financial and service planning so that resources can be directed more clearly to priority areas'.
Turning his attention towards his own organisation, commission chair James Strachan added: 'We [also] aim to reduce the bureaucracy of regulation significantly.'
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