Local government bodies in Wales ‘face challenges' to improve their accounts while meeting statutory deadlines, the nation's auditor general has warned.

A new report warned challenges including the phased introduction of earlier reporting deadlines and changing models of service delivery would all have an impact on the quality and management of accounting arrangements across the sector.

Continued austerity measures may also lead to a reduction in the capacity of finance teams, adding to the pressures of preparing accurate and timely annual accounts, the report added.

Auditor general, Huw Vaughan-Thomas, said local government bodies needed to critically appraise their holding and use of reserves, and ensure they were factored into financial and service delivery plans in a manner that allowed them to live within their ‘future financial means'.

Mr Vaughan-Thomas also said the changing timetable of account deadlines between now and 2020/21 would present challenges for both local government bodies and their auditors.

He added: ‘It's good to see that local authorities are getting better at producing their financial statements – and on time - but there are still issues that need addressing.'