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Council Inspections/Assessments by Audit Commission to be Stopped

June 1, 2010 by  

The Coalition has acted………….again.

Local auditors are advising councils to stop all work relating to the Comprehensive Area Assessment ** (CAA), with the Audit Commission set to outline urgently how it will wind up the programme.

The officer added that instead of councils receiving a use of resources (UoR) score, local auditors had advised them they would instead get a “broad brush” value for money statement on the direction of travel the authority was heading.

 The news will further fuel speculation that the Audit Commission is going to have to make swingeing job cuts in the coming months.

The previous Government put in a “comprehensive” inspection scheme on Local Councils in 2003 overseen by The Audit Commission whose role has expanded over that 7 years way beyond its previously traditional role of being the independent accounting auditor of public finances.

Since then huge amounts of Council Officer time have been expended in preparation for such assessments, writing complex reports inevitably undertaking whatever work was necessary to achieve the best result in the assessment because failure had its penalties.

Did this regime actually improve council performance and services?  Whilst the process did provide a focus for Rochford District Council I am not sure that the standardised approach yielded much in terms of a meaningful regional or national league table because Local Councils are by nature very diverse as they cater for the aspirations and needs of local communities which vary in themselves by local political variation.

Apart from the first couple of years most councils achieved creditable results and it was just an expensive process that had to be followed despite the changing focus in 2009 which breathed little more value into the corpse.

The benefit to UK Plc will be the cut in expensive jobs at the Audit Commission and to local councils there will be the reduction in internal costs although most of these will be in the extra staff salaries that were engaged in the process which could only be saved through redundancies.  It will be interesting to see how local councils will make sure that the local costs of CPA and CAA actually reduce. If there are senior officers who have much less to do then may be the popular thing of the moment will be to share such skills between councils.

As mentioned earlier the ever burgeoning requirements of Government on local councils via The Audit Commission also came through the traditional trail of Auditors.

As a Member of the RDC Audit Committee I created a fuss when I noted that when I was Chair of this Committee 10 years earlier the Audit fees were just about £40,000 per annum.  But in 2010 the figure was £140,000. I just had to follow up on this despite how awkward everyone looked with the Auditors in the room.

Part of the fee was taken up with a Government requirement for our Auditors to conduct a review of how well RDC used its people resources at a cost of £35,000.  Hopefully the Coalition will scrap this unnecessary and compulsory spending.

At the same time the Accounting Audit requirements of the Government over the last 10 years have become more stringent and yet more complex. I made the observation to the RDC Audit Committee that the Government should have spent more time and money auditing the Banks because there is no evidence of the risk or likelyhood of the local authority sector making casino losses of billions. Again hopefully the Coalition will address this and by reducing requirements to a sensible level at least reduce audit costs by 50%.  This could save RDC another £40,000 a year.

So far so good but there is more to do.
 

**Background Notes

Comprehensive Performance Assessment (CPA) reported on how well a council was performing overall compared to other councils in England. It drew together information on auditors’ views, other inspectorate views, and the Commission’s inspections of environment, housing and cultural services. It provided, for the first time, a judgement on a council’s corporate ability to improve services for local people and its leadership of its local community.

From 2009, CPA was be replaced by the Comprehensive Area Assessment (CAA). CAA provided an independent assessment of how well people are being served by their local public services including councils, health bodies, police forces and fire and rescue services, working in partnership to tackle the challenges facing their communities.

The Audit Commission’s Code of Audit Practice requires auditors to prepare an annual audit letter and issue it to each audited body.

The purpose of preparing and issuing annual audit letters is to communicate to the audited body and key external stakeholders, including members of the public, the key issues arising from auditors’ work, which auditors consider should be brought to the attention of the audited body. The annual audit letter covers the work carried out by auditors since the previous annual audit letter was issued.

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