Dear friends and followers of Research for Action,
We hope you have been enjoying the summer this far and have been able to take some relaxing time off.
Research for Action has grown by a staff member since you last heard from us. Gloria started working with us at the end of June as our brand new Advocacy and Communications Coordinator and we are very very excited to have her on board!
Hi, I’m joining Research for Action to work on local audit reform. I’ve had a lot of experience in political organising, activist research and diverse interfering in issues that concern local government and communities. I’m looking forward to combining these in my role, as well as developing Research for Action as a workers’ co-op!
Audit reform update
Welcoming Gloria into the team means that we have a lot more capacity to influence upcoming audit reform and ensure that public audit remains part of the conversation. The government is planning to establish a new audit regulator, the Audit, Reporting and Governance Authority (ARGA). It will likely start in 2024.
Last year, the government ran a consultation on what the local audit framework should look like. They have now published their response to the consultation. Although there are some welcome developments that we among others advocated for (such as making Audit Committees statutory with at least one independent member), there is no role for the public and no mention of holding auditors accountable when their conduct falls below expected standards.
Audit in the news
KPMG fined £14.4m for providing false information about its audits of Carillion and Regenersis (FT, 25/07/2022)
Four former KPMG auditors, including Carillion’s audit partner, were fined and banned from the profession.
Grant Thornton fined £2.05m over private audit failings (City AM, 19/07/22)
The fine was issued regarding their audits of high-street retailer Sports Direct.
Auditors threaten Middlesborough council with statutory recommendations (Public Finance, 18/07/22)
This decision concerns the culture of ‘pervasive lack of trust’: “EY’s report, prepared ahead of a corporate affairs and audit committee meeting, found the council made £32,000 of unlawful payments to a local publicity company between October 2019 and November 2020.”
FRC criticises BDO and Mazars over ‘unacceptable’ private sector audits (FT, 20/07/22)
“While it is encouraging to see some improvement in audit quality at the largest audit firms, consistent, long-term improvement is still required across the market….We will monitor closely the potentially negative impact on the public interest that the de-risking by firms of challenging audits may have on audit quality.” KPMG and Grant Thornton were also criticised.
Local Govt faces rising costs due to inflation, energy crisis, wage costs etc (Local Government First, 25/07/22)
The Local Government Association has calculated risks to local govt in the coming years, with extra cost pressures rising to £3.6 billion in 2024/25.
Has your council published draft accounts?
Summer also means that local authorities’ draft accounts are open to inspection. In English councils, draft accounts had to be published by the 1st of August and the inspection period lasts for 30 working days. In other nations, the time window is tighter. So check your council’s website and act quickly!
We previously published a guide on how to use the rights to inspect council accounts and object to spending that you think might not be in the public interest. You can read it here on our website.
If the thought of accounts feels intimidating (and it certainly does to most of us who aren’t accountants), here is a guide to reading council accounts we published last year.
Finally, if your council hasn’t published the draft accounts as required by law, get in touch. There are some people in the citizen auditor network we are coordinating who are in the same boat.
Next meeting of the citizen auditor network – 25 August, 7pm
Over the last half a year, we have been hosting regular online meetings with a loose network of people who scrutinise local authorities’ spending or governance. Participants are campaigners, bloggers and journalists or simply concerned citizens, and welcome to just dip in and out.
The next meeting is on the 25 August at 7pm. If you are keeping an eye on what’s going on in your council and want to share skills and experiences and learn from others, get in touch with fanny (at) researchforaction.uk about joining the next meeting.
New project on local governance and democracy
We are also very excited to say that we are getting started on a new project! We have entered a partnership with Lankelly Chase who are funding an action research project to find out how people want their cities, towns and villages to be governed. In addition to research, we aim to build and strengthen alliances of groups that can work together in the future to organise and campaign for more radical and democratic governance at the local level.
We look forward to telling you more in future newsletters! Get in touch if you want to know more about our work.
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