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The National Audit Office (NAO) has refused to sign off this year’s government accounts over “severe” backlogs in local authority audits that have resulted in missing data.
For the first time, the NAO announced a “disclaimer of audit opinion” on the latest Whole of Government Accounts (WGA).
The WGA, based on International Financial Reporting Standards, consolidates the audited accounts of over 10,000 organisations across the UK public sector. It is independently audited by the NAO.
This is the 14th year of publication of the WGA but the first time that the NAO has disclaimed the accounts based on backlogs in the firm’s audits of England’s 426 local authorities.
Within his audit report, Davies said that he had been “unable to obtain sufficient, appropriate evidence upon which to form an opinion”.
According to NAO, just over 10% of England’s 426 local authorities submitted reliable data to the WGA. Of the near 90% of local authorities that failed to submit reliable data, 46% submitted information that has not been audited and 44% did not submit any data at all.
Comptroller and auditor general Gareth Davies said: “It is clearly not acceptable that delays in audited accounts for English local authorities have made it impossible for me to provide assurance on the Whole of Government Accounts for 2022-23. It is essential that the steps being taken by the Government to restore timely and robust local authority audited accounts are effective.”
Mike Suffield, director of ACCA’s policy and insights, added: “A disclaimed audit opinion is as bad as it can get, it means there is no assurance at all on the accuracy of the Government’s accounts. If an auditor of a company had made the same announcement, you’d expect the company to be suspended on any stock exchange as their shares would have been in free fall.”
