Sir Tony Redmond, author of an influential review into local government audit, has welcomed the appointment of the Financial Reporting Council (FRC) as the “system leader” but said that it must have a role that is “sector specific”.
Speaking at Room151’s Local Authority Treasurers Investment Forum (LATIF) and FDs’ Summit. Redmond said the central argument of his 2020 report was the need for a new body to coordinate local audit. The government had subsequently decided to give this responsibility to the FRC as it transitions into the Audit Reporting and Governance Authority (ARGA).
“I have no particular difficulty with that suggestion [the appointment of the FRC] as long as it has a role that is sector specific,” Redmond told delegates. “It’s so important that the public sector, particularly local government, is recognised in that new arrangement.”
Redmond is a former local authority finance director and chief executive, and was also CEO and chair of the Local Government Ombudsman. He is currently chair of Nottingham City Council’s Improvement and Assurance Board.
It’s very important that the arrangements being put in place now enable that fee structure to properly resource local audit, and that the problems that have been encountered recently are diminished or eliminated.
‘Inadequate’ audit fees
He said under-resourcing of local audit needed to be addressed and that “local audit had suffered for some time because the fee structure was inadequate”. This, Redmond suggested, was one of the reasons behind the delays that have bedevilled local audit in England for several years.
“When I was carrying out the review, some 40% of audits were incomplete by the due date. That is not acceptable. It’s not acceptable for you, it’s not acceptable for your council taxpayers. And it’s not acceptable for the wider public that that should happen,” he said.
“So it’s very important that the arrangements being put in place now enable that fee structure to properly resource local audit, and that these problems that have been encountered recently are diminished or eliminated.”
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In his speech, Redmond also highlighted the need for induction training for prospective CFOs in local government given the difficult current environment.
“I do believe that there is a need now to introduce some form of induction training programme that enables those prospective CFOs to be trained and to be aware of the sorts of challenges they’re going to encounter if they step up to that role.”
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