The arrangements for auditing the accounts of parish, town and community councils in England and Wales are in need of reform. The cost and regulatory burden of the current regime are disproportionate to the amounts of public money involved. At the same time, the Audit Commission’s existing audit suppliers have found the work wholly uneconomic. The paper proposes that local councils should be divided for audit purpose into three tiers.
Full audit will continue for the 41 largest local councils. The 500 other councils with income or expenditure in excess of 100,000 pounds will be subject to an intermediate audit, based on the independent examination that the Charity Commission applies to charities with an annual turnover up to 250,000 pounds. The 85% of councils with income or expenditure below 100,000 pounds will receive a very basic audit, involving a high-level analytical review, for which they will pay only a low, fixed fee.
Published by the Audit Commission. www.audit-commission.gov.uk