Warning Over “Armchair Audits”

Following the Government’s decision to abolish the Audit Commission, ACCA, the Association of Chartered Certified Accountants, warns that the future audit arrangements for local authorities need to be properly managed in order to avoid inconsistency and uncertainty.

ACCA, which has more than 13,000 members working in the public sector, accepts that the Audit Commission, which currently checks the efficiency and effectiveness of 11,000 public sector bodies, was in need of review. But the decision by the Government to scrap it, which it claims will save £50 million, could prove more costly in the long term.

“The public sector needs a coherent approach when it comes to audit and authorities need to be clear on the processes and expectations involved in it. While much of the Audit Commission’s work is already contracted out to large private sector audit firms, the experienced team at the Commission ensures there is a consistency in approach, something which will be much more difficult to achieve in future”

said Gillian Fawcett, ACCA’s Head of Public Sector.

“Public sector officers currently look to the Audit Commission for best practice benchmarking and guidance. That source of centralised expertise was first available as the District Audit Service, which was consolidated into the Audit Commission in 2003. It will now be lost after 157 years. We would be concerned if the vast wealth of experience and skills within the Audit Commission were lost during the transition period to 2012, since this would create even greater uncertainty with nothing to take its place.”

“While the Communities Secretary’s idea of an army of ‘armchair auditors’ sounds attractive, the reality is that very few members of the public currently look at local authorities’ accounts – even though that opportunity is available to them. In many cases, where people are interested in accounts at all, their interest will be restricted to a specific issue, often to an area of personal interest. Investigating matters of this kind in future will be costly to investigate and may not be of wider financial benefit to the public. Going forward, there needs to be a some form of co-ordinating structure which replaces the Commission and which avoids a ‘post code lottery’ when it comes to public audit.”

The new replacement for the Audit Commission is expected to be partly-controlled by the National Audit Office.

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