Call for local councils to set up audit committees

Nine out of ten local authorities have yet to set up audit committees, despite their proliferation elsewhere in the public sector, according to a report published this week by the Audit Commission.

The report says there is no single committee at local council level whose remit covers all the corporate governance functions of an audit committee.

Mike Barnes, director of audit support at the Audit Commission, said: ‘There are improvements to be made, for example, in following up agreed audit recommendation on a timely basis. Within a year of setting up an audit panel, Leicester City Council had cleared up audit recommendations, some of which had been outstanding for as long as six years.’

The Audit Commission’s report highlights the importance of audit committees in implementing an anti-fraud culture. ‘Local authorities must send a clear signal that any evidence of fraud will be fully investigated and dealt with,’ Barnes said.

Although audit committees are mandatory for all health bodies and recommended for police authorities, local authorities have no legal requirement to set up independent audit committees.