NALC calls for a stronger local government audit system

We have supported the government's proposals to reform the audit sector of smaller authorities and asked the government to increase capacity in local government audits further. 

Responding to the government's consultation on its strategy for overhauling the local audit system in England, wewelcomed the temporary increase to the upper threshold for smaller authorities to £10.2 million. However, this should go further and raise to £15 million. We backed the uplift of the lower audit threshold broadly in line with inflation, allowing the smallest authorities to remain exempt from limited assurance review.

NALC also argued that parish meetings must opt into the limited assurance by declaring when they exceed the lower threshold, rather than opting out by declaring they are exempt as at present, that, with appropriate safeguards, the Annual Governance and Accountability Return must be able to have a wet signature and submitted electronically, and that an urgent system-wide review of the impact and management of vexatious objections, is urgently required.

This consultation commits to a series of measures to fix the broken local audit system, including a local audit vision with eight core principles, establishing a statutory and independent Local Audit Office (LAO) and mandating audit committees. The government is also consulting on several specific proposals as part of this strategy, including potential additional functions of the new LAO, simplifying financial reporting requirements to ensure they are proportionate, improvements to enhance capacity and capability in the local audit sector, such as the introduction of public provision, strengthening the relationship between local bodies and their auditor and reforming the audit regime.