ACCA ‘concerned’ over delayed and backlogged gov accounts

ACCA has said it remains concerned over the “usefulness, timeliness and data quality and collection” of Whole of Government Accounts (WGA) in the UK. The accountancy body said it is calling for a coordinated approach involving government stakeholders, audit firms, regulators, and professional bodies to “address the root causes of the issue”, particularly when it comes to local government audit backlogs. It added that the Treasury should deliver on its re-commitment in the WGA to consider its plan for considering local authority financial sustainability at spending reviews, and the actions it might take to ensure that the local authority sector has the resources it needs to carry out its functions. ACCA also expressed concerns over how prepared local authorities are for the upcoming mandatory implementation of accounting standard IFRS 16 on leases. Commenting on the UK Parliament Public Accounts Committee’s (PAC) consultation on WGA 2021-22, it highlighted the issues of “inconsistent” accounting policies within the public sector and “patchy” application of new accounting standards. Mike Suffield, director of Policy and Insights, ACCA, said: “ACCA continues to have concerns that lessons from the past – on data quality and collection and timeliness of local government audits – have not been learned. Ultimately these risks undermine public trust in government financial management practices and impede informed decision-making at the national level. “We are calling for prudent implementation, especially when considering Private Finance Initiatives. The potential repercussions could result in an upsurge in debt on balance sheets.” Jessica Bingham, ACCA’s regional lead, Policy and Insights, added: “It remains important to understand the preparedness of local authorities for the obligatory integration of IFRS 16 during the 2024/25 fiscal year. ACCA recognises the backlog of pending statutory audits, the challenges faced by local authorities, and concerns regarding the financial stability of certain councils.” ACCA did however note that meeting additional reporting pressures “may simply be undeliverable” in the face of staff and spending cuts. It also wants to see careful implementation of the new standard - Lease Liability in a Sale and Leaseback (Amendments to IFRS 16). It also commended the public sector for its ongoing commitment to upskilling in finance and accounting.