Agency overview | |
---|---|
Formed | 1 April 1983 |
Dissolved | 31 March 2015 |
Headquarters | 1st Floor Millbank Tower Millbank London SW1P 4HQ |
Motto | Protecting the public purse |
Employees | 180 |
Annual budget | £213m (2009-10) [1] |
Website | audit-commission |
The Audit Commission was a public corporation in the United Kingdom from 1983 to 2015. The commission's primary objective was to appoint auditors to a range of local public bodies in England, set the standards for auditors and oversee their work. The commission closed on 31 March 2015, with its functions being transferred to the voluntary, not-for-profit or private sector.
On 13 August 2010, it was leaked to the media, ahead of an official announcement, that the commission was to be scrapped. [2] In 2009-10 the commission cost the central government £28 million to run, with the remainder of its income coming from audit fees charged to local public bodies.
Local government audit law has its origins in nineteenth century Poor Law and public health legislation. [3]
The Audit Commission was established under the Local Government Finance Act 1982, to appoint auditors to all local authorities in England and Wales and it became operational on 1 April 1983. [4] The National Health Service and Community Care Act 1990 extended the remit of the commission to cover health service bodies. Legislation covering the commission's activities was consolidated into the Audit Commission Act 1998. In 1985-86 the commission led the investigation of the rate-capping rebellion which resulted in 32 Lambeth councillors and 47 Liverpool councillors being surcharged and banned from office.
The commission gained responsibility for auditing the National Health Service in 1990, and fire and rescue services in 2004. [2] In 1996 the commission began joint reviews of social services (with the Social Services Inspectorate of the Department of Health), and in 1997, reviews of local education authorities (LEAs) jointly with Ofsted. [5]
On 1 April 2005, the commission's remit in Wales was transferred to the Auditor General for Wales.
The gerrymandering Homes for votes scandal at Westminster Council was uncovered by the Audit Commission's District Auditor, John Magill, who found that between 1987 and 1989, council houses were sold at below market value to families likely to vote Conservative. [6]
Mr Magill found the former leader of the council, Dame Shirley Porter and five other council officials 'jointly and severally' liable for repaying £36.1 million to the council. [7] Mr Magill's verdict was upheld in the House of Lords in 2001. [8] Dame Shirley Porter eventually settled in 2004, paying £12.3 million to Westminster Council. [9]
Since 1996 the Audit Commission has run the National Fraud Initiative, [10] a UK-wide anti-fraud programme. Between 1996 and 2013 it traced £1.17 billion in fraud, including £215 million in 2008-9, [11] as more councils provided data and most recently £203m in 2012-13. [12]
On 13 August 2010, the Secretary of State for Communities and Local Government, Eric Pickles, announced that the commission was to be scrapped, with its functions being transferred to the voluntary, not-for-profit or private sector. [2] The government aimed to save £50m annually, with the commission's function transferred to the Local Government Ombudsman and private accounting firms. [2]
Accounting body ACCA expressed doubt that the private sector would match the commission's experience and consistency. [13]
The Financial Reporting Council suggested to a House of Lords committee that government should not sell the Audit Commission's practice to any of the Big Four auditors, otherwise their dominance of the audit market would be further enhanced. [14]
In 2012 a proposed employee-owned firm won only one of ten regional contracts and was launched as a subsidiary of Mazars. Grant Thornton won the largest share, four contracts, and took on about 350 staff from the commission. KPMG and Ernst & Young won three and two contracts respectively. The Commission estimated that audit fee savings at 'up to 40%' will arise as a result of these arrangements.
A small number of staff were retained at the Audit Commission to monitor these contracts until the commission was abolished. [15] Provision to abolish the commission was included in the Local Audit and Accountability Act 2014, and the commission was formally closed on 31 March 2015. [16]
By 2023, it was being reported that many councils were years behind on having their accounts audited and that the closure and privatisation of the Audit Commission was being seen as a failure. [17] [18] In an October 2023 piece for The Municipal Journal , Lee Rowley, the local government minister, admitted that the local government audit system "has not worked as well as it should for a number of years". [19] Only five out of 467 local authorities had their 2022-23 accounts signed off before the required deadline. [20] The Guardian reported that ten public bodies (including Slough Borough Council, which had issued a Section 114 notice in 2021) had not had an audit in five years and that, according to the Institute of Chartered Accountants in England and Wales, only 101 people in the entire country were qualified to audit local government accounts. [18]
Functions of the Audit Commission included:
The Audit Commission worked in partnership with – but operated independently of – a number of government departments including the Department for Communities and Local Government, the Home Office, and the Department of Health.
Previously the commission also produced performance assessments for councils, fire and rescue services, and housing organisations. In July 2009, it launched the Comprehensive Area Assessment, which assessed the effectiveness of local public services.
Between 1983 and 1998 the commission was self-funding, operating purely on income from audit fees. In 1998 the central government began providing grants to the commission due to its new responsibilities under "Best Value" legislation, and for the cost of setting up the Best Value and Housing Inspectorates. [5]
In 2009-10 the commission had an operating income of £213.1m. 86% of this came from fees charged to bodies audited; just 13% (£28.0m) came from central government grants. [1] Around 70% of the commission's income in 2009-10 came from the local government sector, with the remainder coming from the health sector. [1] Before the Coalition government announced further cuts, the commission had planned to cut spending by £32.1m by March 2013. [1]
Thirty percent of the commission's audits were carried out by five private audit firms. [1]
The governing board of the Audit Commission was made up of commissioners appointed by the Department of Communities and Local Government. Previous chairmen included Jeremy Newman, former chief executive of BDO International (2008-2011) and Michael O'Higgins (2006-2012), who had for 10 years previously been managing partner of PA Consulting.
Marcine Waterman took up the post of Controller of Audit in September 2012.
Previous incumbents include Eugene Sullivan, Steve Bundred (later of Monitor), Sir John Banham (later of the CBI), Sir Howard Davies (later of the CBI), Bank of England, FSA (Financial Services Authority) and LSE (London School of Economics), and Sir Andrew Foster.
The Regulation of Investigatory Powers Act 2000 is an Act of the Parliament of the United Kingdom, regulating the powers of public bodies to carry out surveillance and investigation, and covering the interception of communications. It was introduced by the Tony Blair Labour government ostensibly to take account of technological change such as the growth of the Internet and strong encryption.
Ernst & Young Global Limited, trade name EY, is a British multinational professional services partnership based in London, England. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and PwC, it is considered one of the Big Four accounting firms. It primarily provides assurance, tax, information technology services, consulting, and advisory services to its clients.
Local government in Wales is primarily undertaken by the twenty-two principal councils. The councils are unitary authorities, meaning they are responsible for providing local government services within their principal area, including education, social work, environmental protection, and most highway maintenance. The principal areas are divided into communities, most of which have an elected community council. The services provided by community councils vary, but they will typically maintain public spaces and facilities. Local councils in Wales are elected; the most recent local elections in Wales took place in 2022, and the next are due to take place in 2027.
The government agencies in Sweden are state-controlled organizations that act independently to carry out the policies of the Government of Sweden. The ministries are relatively small and merely policy-making organizations, allowed to monitor the agencies and preparing decision and policy papers for the government as a collective body to decide upon.
The National Audit Office (NAO) is an independent Parliamentary body in the United Kingdom which is responsible for auditing central government departments, government agencies and non-departmental public bodies. The NAO also carries out value for money (VFM) audits into the administration of public policy.
Deloitte Touche Tohmatsu Limited, commonly referred to as Deloitte, is a British multinational professional services network based in London, England. Deloitte is the largest professional services network by revenue and number of employees in the world and is considered one of the Big Four accounting firms, along with EY, KPMG, and PwC.
A police authority in the United Kingdom is a public authority that is responsible for overseeing the operations of a police force. The nature and composition of police authorities has varied over time, and there are now just four dedicated "police authorities" in the United Kingdom, although the term can refer to various similar successor bodies.
The state auditor of Minnesota is a constitutional officer in the executive branch of the U.S. state of Minnesota. Nineteen individuals have held the office of state auditor since statehood. The incumbent is Julie Blaha, a DFLer.
The Financial Reporting Council (FRC) is an independent regulator in the UK and Ireland based in London Wall in the City of London, responsible for regulating auditors, accountants and actuaries, and setting the UK's Corporate Governance and Stewardship Codes. The FRC seeks to promote transparency and integrity in business by aiming its work at investors and others who rely on company reports, audits and high-quality risk management.
A Welsh Government sponsored body (WGSB) is a non-departmental public body directly funded by the Welsh Government. Under the Government of Wales Act 1998 the bodies were sponsored by the National Assembly for Wales and were known as an Assembly sponsored public body, and this was changed by the Schedule 3 of the Wales Act 2017 which amended the Government of Wales Act 2006.
Sir John Bryant Bourn was a British auditor who was the Comptroller and Auditor General and therefore a head of the National Audit Office.
State auditors are fiscal officers lodged in the executive or legislative branches of U.S. state governments who serve as external auditors, program evaluators, financial controllers, bookkeepers, or inspectors general of public funds. The office of state auditor may be a creature of the state constitution or one created by statutory law.
John Seddon is a British occupational psychologist and author, specialising in change in the service industry. He is the managing director of Vanguard, a consultancy company he formed in 1985 and the inventor of 'The Vanguard Method'. Vanguard currently operates in eleven countries. Seddon is a visiting professor at Buckingham University Business School.
The Controller and Auditor-General is an Officer of the New Zealand Parliament responsible for auditing public bodies. John Ryan began his seven-year term as Controller and Auditor-General on 2 July 2018. The Deputy Controller and Auditor-General is Andrew McConnell. Their mandate and responsibilities are set out in the Public Audit Act 2001. They are appointed by the Governor-General on the recommendation of the House of Representatives.
Public water supply and sanitation in England and Wales has been characterised by universal access and generally good service quality. In both England and Wales, water companies became privatised in 1989, although Dwr Cymru operates as a not-for-profit organisation. Whilst independent assessments place the cost of water provision in Wales and England as higher than most major countries in the EU between 1989 and 2005, the government body responsible for water regulation, together with the water companies, have claimed improvements in service quality during that period.
The homes for votes scandal was a gerrymandering controversy involving the Conservative-led Westminster City Council in London. Having narrowly maintained their control of the council in the 1986 local elections, Conservative councillors initiated a programme of selling off council homes in eight marginal wards, in the belief that owner-occupiers were more likely to vote Conservative than council tenants. Hostels in the marginal wards were closed, with some homeless people moved into condemned accommodation. The policy came to an end after it was exposed on the BBC current affairs programme Panorama in 1989. On investigation, the policy was ruled to be illegal. Former leader of the Council Dame Shirley Porter was found guilty of wilful misconduct and ordered to repay £36.1m. She eventually settled with the council for a sum of £12.3 million.
Following the 2010 United Kingdom general election, the UK Government under the Cameron–Clegg coalition announced plans to curb public spending through the abolition of a large number of quasi-autonomous non-governmental organisations (quangos). This was styled in the national press as a "bonfire of the quangos", making reference to Girolamo Savonarola's religiously inspired Bonfire of the Vanities.
The auditor-general of New South Wales helps the Parliament of New South Wales hold government accountable for its use of public resources.
The auditor of public accounts of Nebraska, more commonly known as the "state auditor", is an elected constitutional officer in the executive branch of the U.S. state of Nebraska. Twenty-five individuals have held the office of auditor of public accounts since statehood. The current auditor is Mike Foley, a Republican.