Local Government Finance: Audit

Ministry of Housing, Communities and Local Government written question – answered on 24th July 2019.

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Photo of Lord Black of Brentwood Lord Black of Brentwood Conservative

To ask Her Majesty's Government what assessment they have made of the effectiveness of the National Audit Office and Public Sector Audit Appointments Ltd in protecting the interests of council tax payers and improving value for money in local authorities.

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth The Parliamentary Under-Secretary of State for Wales, Parliamentary Under-Secretary (Housing, Communities and Local Government)

The National Audit Office (NAO) is independent of government and directly accountable to Parliament, therefore, it would not be appropriate for a government department to review their effectiveness.

Through the Local Audit and Accountability Act 2014 (the 2014 Act), both the NAO and Public Sector Audit Appointments Ltd (PSAA) have roles relating to the audit arrangements for local public bodies in England.

The Redmond Review, which is due to report in Spring 2020, will consider important aspects of the local audit and accountability framework and how the various elements of the framework interrelate, including PSAA’s role as the specified audit procurement body and the NAO’s role in relation to the Code and guidance for local auditors. But the NAO’s general role and wider powers, including its value for money studies, are outside the scope of the Redmond Review.

Audit is only part of the wider assurance and accountability system that protects the interests of tax payers. This includes clarity about who is responsible for resources; statutory codes and rules which require councils to act prudently in their spending; a framework of internal and external checks and balances including audit and whistleblowing; transparency and publication of data; and requirements to have strategies and action plans on fraud.

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