Welsh auditor general warns on community council accounts

31 Jan 17

Almost one third of community councils in Wales are failing to either prepare their accounts on time, manage risk, or set an appropriate budget, according to the Welsh spending watchdog.  

A Wales Audit Office report found that 200 of the 735 Welsh community councils (30%) received a ‘qualified’ audit opinion, which could and should have been avoided.

Community councils in Wales received over £43m of public money in 2015-16, and spent £40m. They manage reserves over £32m and long-term assets worth over £188m.

Among their responsibilities are the upkeep of village greens, public walks and swimming pools, and public lighting and surveillance.

This is the fifth report from the auditor’s office summing up issues revealed by external parties undertaking audits of community councils, and the first under a new, more stringent regime. The auditor found that many community councils “had not grasped the requirements of the new arrangements”, which are intended to establish consistency across all the councils.

Over 50 councils (8%) failed to meet the timetable for preparing and approving accounting statements, while more than a third (36%) failed to set an appropriate budget that included all the elements required by law.  

Also, according to the report, too many councils submit annual returns that are incomplete or contain simple mistakes. Auditors identified errors in the accounting statements of 149 (23%) of councils.  

The auditors voiced particular concerns regarding the readiness of Welsh community councils to take on additional powers, as they are transferred down from county councils. In particular, they found a disproportionate number of smaller community councils were at fault.

Moreover, the report said a clear majority of councils (64%) would struggle to demonstrate they had an adequate system of internal audit in place, and that the system was working properly.

Commenting on the findings, Welsh auditor general Huw Vaughan Thomas said accountability and scrutiny of the use of public money is growing ever tighter.

He said: “Community councils are responsible for over £43m worth of funds and are likely to be devolved more responsibilities.

“It is worrying to see that a number of councils have qualified opinions which are easily avoidable and I would urge them to undertake an investigation into their current practice to ensure they are compliant with their legal requirements before the 2016-17 audit reviews.”

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