The Exercise by Local Government Auditors of their Functions 2012
The Chief Local Government Auditor, Louise Mason, today published her report on the exercise by local government auditors of their functions in the year to 31 March 2012. The report comments on a range of topics arising from financial audit work in local government bodies.
The Local Government (Northern Ireland) Order 2005 requires the Chief Local Government Auditor to prepare and publish an annual report. This report is the sixth report under this requirement.
Findings and Recommendations
The Chief Local Government Auditor has highlighted areas of strength and areas for improvement within local Councils. This includes the following issues:
Prompt Payment Performance
The Report reviews the prompt payment performance of local Councils and makes comparisons with other public bodies namely Central Government, Health and Social Care Trusts and Education and Library Boards. On average, local Councils had the lowest performance for prompt payment of invoices. Mrs Mason concluded that “Although prompt performance has generally improved, there are still areas where performance is far from satisfactory”. She recommended that “Local Councils should review payment processes to ensure that the time taken to pay suppliers is minimised and the targets and guidance set by the Department of the Environment is followed”. Better performance in this area has the potential to significantly improve cash flow for local firms providing services to Councils.
Property asset management
The Report identifies property asset management as a key area for Councils to consider in the context of local government reform. In Mrs Mason’s opinion “Northern Ireland Councils lag behind progress made by local government in the rest of the United Kingdom in relation to asset management arrangements”. The Report summarises the findings of a survey which was undertaken which examined the current management arrangements of Councils’ property assets.
The Report recognises that all local Councils now have an audit committee and their continued effective operation is key in promoting and improving good corporate governance. Mrs Mason highlights the importance of independent representation and an appropriate mix of skills and knowledge to ensure an audit committee operates effectively. She recommends that counter fraud and whistleblowing arrangements and investigations should feature as a standing agenda item at all meetings of audit committees.
For several years the Chief Local Government Auditor published a series of annual reports on absenteeism in Northern Ireland Councils, the most recent being for the 2009-10 year. Mrs Mason has not prepared an annual report on absenteeism for 2010-11 but she has drawn attention to continuing improvements based on unaudited information supplied by Councils. The Report reveals that nineteen Councils improved their performance and notes that continuing this trend is particularly important given the current economic environment.
The report asks Councillors and Officers of local government bodies to consider the matters outlined and review how their Council is approaching the issues. The Chief Local Government Auditor considers this will assist organisations to improve upon future financial management and governance arrangements.
- The Department of the Environment may, with the consent of the Comptroller and Auditor General for Northern Ireland designate members of NIAO staff as a Local Government Auditor and as Chief Local Government Auditor. The Chief Local Government Auditor is also the Assistant Auditor General for financial audit undertaken by NIAO
- Background briefing can be obtained from the NIAO by contacting Rodney Allen (028 9025 1122) or Roger McCance (028 9025 4312).