Welsh auditor slams town councils’ persistent accounting failures

13 Sep 13
Many Welsh town and community councils have ‘common and fundamental issues’ of weak financial management that must be addressed, the auditor general for Wales said today

By Richard Johnstone | 13 September 2013

Many Welsh town and community councils have ‘common and fundamental issues’ of weak financial management that must be addressed, the auditor general for Wales said today.

In a scathing report on the governance of town and community councils, Huw Vaughan Thomas said he was concerned about the ‘persistent failure’ to publish an audited annual return on a timely basis. 

The report, published today, reviewed the audits for the 2011/12 financial year at more than 730 local councils. Auditors found accounts were often not submitted on time, and many were of poor quality. 

In total, the councils spend more than £40m of public money each year. However, the Wales Audit Office said around 40% of them did not submit their accounts on time. In addition, one in ten of submitted accounts needed correction.

Overall, auditors issued qualified audit opinions at 130 local councils, or around 17%. 

Vaughan Thomas said the fact that nearly one in five of the authorities failed to meet the required standards of governance had to change. ‘In my view, it is unacceptable that local councils, funded by public money, should fail to discharge their legal obligations and prepare statements of accounts for audit.’

He said the WAO would make a number of reforms to how they are audited in the future. 

In particular, audits would now examine much more closely the governance arrangements of individual authorities. Councils will be notified in advance of the specific areas, such as financial management, that will form part of annual reviews. 

This arrangement will allow them to identity where they need to improve, and to make any necessary changes, before the start of each financial year, Vaughan Thomas said.

‘The number of qualified opinions are also far too high. My new audit arrangements should help local councils focus more clearly on fulfilling their financial responsibilities to the standards I, and the people of Wales, expect.’

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