Auditor voices concerns over Welsh councils’ financial management

The Auditor General for Wales has commended improvements in the delivery of end of year accounts, but warns that improvements are needed in the financial management of Welsh councils.

A new report, entitled ‘Financial Management and Governance in Local Councils 2014-15’ found that the number of councils with qualified audit opinions had increased by 3 per cent since 2013-14, from 85 to 113.

The auditor stresses that all audit opinion qualifications are avoidable if councils have adequate and effective financial management, and was critical of the fact that over 40 per cent of Welsh councils have received one or more qualified audit opinions since 2011-12.

The report was particularly concerned with the number of councils who had received a qualified audit opinion for the first time, as 62 out of the 113 councils qualified in 2014-15 had not received a qualified audit opinion between 2011 and 2014.

Despite this criticism, the report did praise the progress made in delivering audit reports on time, with 96 per cent of all councils now achieving the statutory reporting deadline of 30 September. This represents a two per cent improvement from the previous year and continues a steady trend of improvement in this area.

Huw Vaughan Thomas, Auditor General for Wales, said: “Given the progress made last year by community and town councils in submitting timely accounts the results for this year are met with much disappointment.

“A number of councils who have previously submitted their accounts on time and to standard have failed to maintain their previous standards and it is unacceptable that so many councils have allowed standards to fall.

“I would strongly encourage councils to make a commitment to addressing the common issues and weaknesses highlighted in today's report and work closely with auditors to prepare future accounts to an acceptable standard.”

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