Local councils making progress in improving governance and management of public money

Thursday, January 25, 2018 - 10:32am

But there is further scope to develop more robust accountability arrangements

Local councils in Wales are managing increasing sums of public money and assets, and  in order for councils to manage these effectively, they need to improve the governance and  financial management arrangements they have in place. This is the overall conclusion of the Auditor General’s report on Financial Management and Governance in Local Councils 

This is the sixth annual report published by the Auditor General for Wales which looks at the financial management and governance of over 730 town and community councils across Wales.

The report also concludes that although there has been some improvement in governance arrangements, too many council are failing to comply with the statutory timetable for preparing accounts, as over 80 council failed to meet the statutory deadline for accounts in 2016-17.  Councils also frequently submit annual returns that are incomplete or contain simple errors.

Governance arrangements within local councils also vary. The report found that a significant numbers of them demonstrate a lack of understanding of the governance framework they operate in. Not all councils were found to be complying with their statutory responsibilities such as, having evidence of a code of conduct for members or having a website.

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. The main areas that will be looked at, include focusing on financial management and governance, looking at how councils manage reserves and comply with statutory rules for certain types of expenditure. There will also be a consultation  on a national study which will access the adequacy and effectiveness of internal audit within the sector.

Auditor General, Huw Vaughan-Thomas said today: “Although town and community councils have made progress to improve their governance and management arrangements, many are still failing to publish their audited annual accounts in a timely way, and there are still too many receiving qualified audit opinions. As their revenues continue to increase, it important that councils improve their governance arrangements, and ensure their members adopt and comply with a code of conduct, so that they fully understand and comply with their statutory responsibilities. ”