News & Publications

Wales Audit Office – COVID-19 & the audit of community & town council accounts

Time Published 20th March 2020

The following update from the Wales Audit Office will be sent to all town and community councils in Wales today:

“Like everyone, I am closely monitoring the fast-moving situation regarding the spread of the COVID-19 virus. As well as the delivery of the Auditor General’s statutory responsibilities, our priority is to ensure the health, safety and well-being of WAO staff, their families and those of our partners elsewhere in the public service at this incredibly challenging time.

We understand that many community and town councils are concerned about the impact of the COVID-19 virus on the councils’ ability to prepare and approve the accounts and to submit those accounts for audit. I have signalled to my staff that I want our approach and engagement with all audited bodies to be sensitive, pragmatic and mindful of the pressures you face.

This letter is to reassure you that you should not worry about your ability to produce the 2019-20 accounts for audit.

We have discussed and agreed our approach below with Welsh Government officials and have consulted One Voice Wales and the Society of Local Council Clerks.

What do the Regulations require?

Regulation 15 requires that the RFO certifies and the Council approves the accounts by 30 June 2020. The RFO must certify the accounts before the Council approves them.

However, provision is made in Regulation 15(3) for situations where the RFO does not certify the accounts by 30 June. In these cases, the council must publish a notice (in a conspicuous place and on its website) setting out why the RFO has not certified the accounts.

The Council must then make arrangements to comply as soon as possible.

How will auditors deal with delays to the accounts and audit process?

BDO and Grant Thornton have already sent to councils, the audit packs including the 2019-20 annual return and the notice of audit. Councils will receive these over the course of the next week.

We recognise the impact that the current restrictions may place on individuals. It is likely that, in the short term, the UK Government guidelines will impose more restrictions and as a result, councils will be unable to meet and internal auditors may be unable to complete their work and report to the council. This means that there are likely to be delays to councils preparing and approving accounts. In our opinion, the Regulations contain sufficient flexibility to allow for the present extraordinary circumstances. Our approach to the 2019-20 audit is therefore as follows:

  • Councils are encouraged to prepare the annual accounts and governance statement as soon as possible and, if possible, for the RFO to certify the accounts in accordance with the timetable set by the Regulations. As long as clerks remain well, this can be completed while councils are not holding meetings. • If the accounts are unlikely to be certified by the RFO and approved by 30 June, councils should notify their audit team, by email, that there will be a delay.
  • Councils must then publish a notice as required, including placing a copy on their website. Councils should provide evidence of this to the audit team when the approved annual return is eventually submitted.
  • Provided a notice is published as set out above and sufficient evidence is provided, audit opinions will not be qualified. Councils will have demonstrated compliance with the Regulations.
  • The date for the exercise of electors’ rights is set out in the audit notice included with the annual returns. It is likely that there will be a significant delay to the audit process. Therefore, we will need to set a new date for the exercise of these rights and councils do not need to publish the audit notice they have just received.
  • When the accounts have been certified and approved, councils will then need to notify the audit team and submit the annual return and additional information to the audit team promptly.
  • Auditors will agree a new date for the exercise of electors’ rights once they have been notified that the accounts have been approved. When agreeing the revised dates with councils, auditors will provide a reminder of the information required for the audit.

We would ask that councils update the audit team on the likely timetable for submission of the annual returns. Once councils are able to reconvene and meet, they should send the approved annual returns and supporting information to their audit teams as soon as possible to help the audit teams to manage workflows.

There may be some delay in completing the audit of individual councils due to circumstances beyond the control of the audit firms. In common with many councils and other public bodies, the Wales Audit Office, BDO and Grant Thornton have temporarily closed their offices. We are discussing with the two audit firms, how we will manage delivery of the 2019-20 audits once the immediate COVID-19 situation has eased.

If you have any further queries or concerns please contact my colleague Deryck Evans (deryck.evans@audit.wales) or by phone at 02920 320559.”

Anthony Barrett
Assistant Auditor General
Wales Audit Office

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