Two birds one stone on audit

By Simone Hines | 06 October 2020

There’s no doubt the Redmond review is a thorough and in-depth study and pinpoints what we have known for some time – that the current audit system isn’t working and needs to change. I still can’t help feeling a little underwhelmed.

The recommendation to push back the accounts completion and audit dates is, in my view, a backward step, a point the Society of District Council Treasurers made during the review process.

Yes, the current timetable is ambitious and puts pressure on finance teams (especially for small finance teams in districts) but it means we can put them to bed early and crack on with more meaningful things – mainly the budget-setting process and vital projects such as town centre and housing schemes.

In districts it’s the same key people closing the accounts who are also responsible for getting the budget-setting process under way in the summer, so dragging the accounts and audit process out until September is an unwanted distraction.

The real wasted opportunity from the review is streamlining of the accounts. The review found an almost unanimous view that the current statement of accounts are unfathomable to most readers, yet the only recommendation is to add another statement.

I partly understand the rationale behind this addition in helping readers interpret the difference between the complex statutory accounts and the actual financial position of the council, but adding a further statement is the wrong answer. It is even more work for finance teams and the need for the statement itself is further evidence that the current accounts are not fit for purpose.

Instead, a fundamental review of financial reporting in local government and what stakeholders are really interested in should be done. If we cracked this conundrum it might reduce the time needed to audit the accounts, so other issues around the timetable and fees may not be such a problem. Two birds, one stone.

Simone Hines is president of the Society of District Treasurers and executive director of resources at Nuneaton and Bedworth BC

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