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Parliament has increased the National Audit Office (NAO) resource budget by 5.6% to £80.52m for 2021-22 but this is relatively small compared to the increased audit risk and £372bn costs arising from the COVID-19 pandemic.
Grant Thornton recently issued statutory recommendations to Slough Council after finding that: the finance team had insufficient skills or capacity to produce financial statements or working papers of a reasonable quality; reserves had fallen to an unsustainably low level; and, the council had inadequate governance arrangements over subsidiary and joint venture companies.
Section 24 of the Local Audit and Accountability Act gives local authority auditors the power to issue written recommendations, which must be published and considered at a public meeting within one month from the date of issue. Slough Council held its public meeting on 18 May and has accepted the recommendations.
Reforms to restore trust in audit and corporate governance are primarily aimed at the private sector, but there is a potential that some public sector organisations might come within the scope of the proposals.
The Department for Business, Energy and Industrial Strategy (BEIS) published its long awaited consultation document Restoring trust in audit and corporate governance in March 2021. The proposed reforms include new reporting on controls and resilience, new duties for auditors, additional requirements for audit committees and a strengthened regulator – the Audit, Risk and Governance Authority (ARGA) - with greater enforcement powers against directors.
The government proposes that the majority of the reforms, at least initially, will apply only to public interest entities (PIEs). Currently PIEs are defined as entities whose transferable securities are admitted to trading on a regulated market, credit institutions or insurance undertakings.
Mazars says the termination settlement paid to York’s former chief executive was “arguably unlawful”, while also criticising how the council dealt with conflicts of interest.
Mazars recently issued a public interest report on payments made by the City of York Council on the termination of employment of its former chief executive, raising concerns about governance, conflicts of interest, record keeping and a failure to follow due process. York held a public meeting on 4 May 2021 to discuss the findings of the report and to agree actions to implement its recommendations.
The Local Audit and Accountability Act 2014 requires external auditors in England to issue a formal public interest report when they identify significant matters during the course of an audit that they believe should be brought to the attention of the public body concerned and to the public. Public interest reports are submitted to the Secretary of State for Housing, Communities and Local Gove