The National Audit Office (NAO) should be invited to audit the Tees Valley Combined Authority’s accounts to improve the large backlog, the Public Accounts Committee’s (PAC) chair has said.
In a letter published in the Financial Times, Meg Hillier highlighted the “crisis” that has emerged in local audit, with only 12% of audits completed in time for the 2021/22 deadline and some councils having had no audit for two years. This has resulted in a lack of transparency over the use of taxpayers’ money, she said.
Hillier detailed that the PAC has repeatedly highlighted its concerns about the government’s oversight of local authorities. “Local audit committees are woefully under-resourced, many councils have understrength finance teams and there is a shortage of experienced public auditors willing to call out risky investment decisions,” she said.
Hillier also stated that the government’s attempt to sort out the local audit “crisis”, by embedding the task with the new private sector-focused Audit, Reporting and Governance Authority, has been unsuccessful.
She said: “The big audit firms are seemingly less keen to take on local audit when the more lucrative private audit market provides plenty of work.
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“Many want the National Audit Office to fill that void, but the NAO’s formal powers do not extend into local authorities — it only has automatic rights to audit government and its arms-length bodies and, more recently, the BBC and the Bank of England.”
However, Hillier stated that the NAO can only audit another body by ministerial request and if that body voluntarily agrees to open its books.
“Any decision to invite the NAO to audit the authority is up to the mayor — who has agreed in principle — and to the levelling up secretary [Michael Gove]. But in the interests of transparency, it would be wise for them to allow this,” she added.
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