Comptroller and auditor general, National Audit Office
“At its core, the role of public audit is to assure taxpayers that the money they provide through compulsory taxation is accounted for accurately and spent on the purpose intended. “The current shake-up in audit regulation is a response to the failure of some auditors to spot either material misstatements in published accounts or signs of imminent financial failure. “Taxpayers do not have the option of withdrawing their investment if they become concerned at the way it is being used. Public audit provides additional assurance that resources are applied honestly, for the purposes approved by Parliament, economically, efficiently and effectively.
“Central government spending is the focus of around 60 NAO value for-money reports each year and a regularity opinion for each department, allowing us to call out where money is not spent efficiently. Our statutory independence and direct funding from Parliament for central government audit helps us do this. Local bodies receive a VFM conclusion from local auditors. The NAO’s current review of the Code of Audit Practice for local bodies is examining whether this work requires a sharper focus.”
Auditor general, Scotland, on Twitter
“In more than two decades of working in public audit in Scotland, I cannot recall a year when public services have experienced such pressure and uncertainty.”
Wales Audit Office
“Four out of seven health boards in #Wales once again failed to meet their financial duty to break-even over a three-year period, according to their 2018-19 accounts.”
Advisor to ICAEW on public finances
“With public spending over £800bn per year – more than £1,000 per month for each person living in the UK – the importance of public audit has never been greater. But very few people read the annual reports and financial statements of public bodies, let alone the reports of their auditors. While the focus of public audit reform is quite rightly on how to improve the audit process and the performance of auditors, I believe that we must also look more widely at the financial reporting environment within the public sector.
“Where are the public equivalents of the industry analysts, active investors, financial journalists, and multiple regulators that analyse private sector financial reports and (most importantly) ask difficult questions? “With billions of pounds at stake every year, we need public bodies and their auditors to up their game. This can only happen if they have an actively engaged audience.”
ICAEW Special Report
Local public audit: expectations gap
“The public needs assurance that when they pay their taxes, the money spent by local public bodies will be spent properly, that there will be transparency and accountability in how that money is spent and how services are delivered. The integrity of financial statements and how government bodies spend public money is therefore important in building trust and confidence in the public sector.”
“An important but sometimes overlooked aspect of external audit is to provide early warning of financial pressure or failure. “While no one is eager for the return of the Audit Commission, most would agree that the quality of local audit has diminished since it closed its doors in 2015, with costs having overtaken quality as the major deciding factor in service procurement. This is particularly concerning at a time when budget pressures, service demand and levels of financial risk are all increasing at an unprecedented rate. In such circumstances, more assurance is needed, not less.
“That is why CIPFA is fully behind the review into local audit that was launched by then communities secretary James Brokenshire at our conference in July. This vital work, which will be led by CIPFA past president Sir Tony Redmond, will be critical for determining future regulatory requirements. “The review will allow us to identify what is needed to make local audit as robust as possible, and how the audit function can meet the assurance needs, both now and in the future, of the sector as a whole.
“However, there is no single player that can take this forward. A review is only as strong as the sum of its parts, and improving local audit will only be achieved if government, stakeholders, clients who pay for and receive audit, and the general public can all coalesce around a vision for the future. And with the Conservative Party leadership contest recently concluded, we must not be complacent about keeping this work at the top of the political agenda.”
Regulatory policy manager, ICAEW
“Local government and health bodies are operating in difficult times. This sometimes results in behaviours and decisions that may not be in the best interest of the public purse. “The role of local auditors is crucial in providing accountability and transparency. The public need assurance that when they pay taxes, their money will be spent properly. The scope of local audit is wider than the private sector, including audit findings on the accounts, opinions and conclusions on regularity and value for money arrangements.
“Auditors’ reports alone cannot provide assurance. Those charged with governance within local bodies need to take more responsibility for how they manage public finances. Often, they do nothing, and there is no consequence.
“Government has a responsibility to provide the right framework within which local bodies and local auditors can operate effectively and independently of each other to preserve the integrity of the financial statements and provide trust and confidence in local spending. The Redmond Review is currently considering this.”
Public sector audit group lead, Deloitte
“Public audit is subject to many of the same challenges and criticisms that corporate audit is. The scope of a public audit particularly around value for money (VFM), and fees to auditors are at their lowest in my career. Conversely, this is at a time of unprecedented financial pressure on public bodies and the greatest ever complexity in public accounts.
“While VFM is very subjective, the scope of the current conclusion on VFM arrangements in local government provides little insight into the relative performance of councils. A VFM qualification from the auditor at present seems to have little impact or consequence.
“Public bodies could help close the stakeholder expectation gap with more qualitative reporting on how they measure VFM. “With the right solution and a sustainable fee model, we can strengthen the financial health and stability of public services, offer a more proactive audit and increase transparency and certainty for the public.”