Community councils need to improve financial management and governance

Monday, January 30, 2017 - 11:59am

“The number of councils receiving qualified audit opinions is too high” says Auditor General.

Too many community councils in Wales are receiving avoidable qualified audit opinions, a report from the Auditor General for Wales has said today.

In the fifth annual investigation of the financial management and governance of over 735 community councils across Wales has concluded that there is scope to further develop and improve financial management and governance, especially in regards to the quality of financial reporting.

This is made even more relevant as county councils look to transfer more assets over to community councils, who currently are responsible for over £43 million of public money. Over 200 councils (30%) received a qualified audit opinion on their 2015/16 accounts, 

They need to improve the timeliness in the way they prepare accounts and the quality of those accounts. In a small number cases the weaknesses identified have been deemed sufficiently serious to make formal written recommendations to individual councils.

Our report concludes by highlighting the key themes that will be looked at more closely in future audits and the work that councils need to do more to make sure they are compliant with the regulations, including the implementation of a code of conduct, and a focus on the way they manage reserves and balances.

The Auditor General for Wales, Huw Vaughan Thomas, said today:

“The accountability and scrutiny that comes with the use of public money is growing ever tighter. Community councils are responsible for over £43m worth of funds and are likely to be devolved more responsibilities. It is worrying to see that a number of councils have qualified opinions which are easily avoidable and I would urge them to undertake an investigation into their current practice to ensure they are compliant with their legal requirements before the 2016-17 audit reviews.”