Dáil Éireann Debate, Tuesday - 23 January 2018
638. Deputy Seán Haughey asked the Minister for Housing, Planning and Local Government if he is satisfied that local authority spending is monitored in a satisfactory manner, including spending on infrastructural projects; the role of the National Oversight and Audit Commission; his plans to increase scrutiny of such spending; and if he will make a statement on the matter. [3024/18]
Amharc ar fhreagraThe elected members of local authorities have direct responsibility in law for all reserved functions of the authority, including adopting the annual budget and authorising borrowing, and are democratically accountable for all expenditure by the local authority. It is a matter for each local authority to determine its own spending priorities in the context of the annual budgetary process, having regard to both locally identified needs and available resources.
There is a threefold approach to the audit of local authorities; the Local Government Audit Service (LGAS), which is an independent part of my Department, the National Oversight and Audit Commission (NOAC) and local authority audit committees.
The LGAS performs the independent, external audit of local government. Section 118(3) of the Local Government Act 2001 sets out the primary duties of the local government auditor as follows:
“In the course of the audit of accounts of the local authority or other body, the local government auditor shall carry out such audit tests as he or she considers appropriate in order to be satisfied as to:
(a) whether the annual financial statement is prepared in accordance with section 108 or with the accounting requirements otherwise applicable to the body concerned,
(b) whether the annual financial statement presents fairly the financial position of the authority or other body and of its income and expenditure for the period in question,
(c) whether the transactions of the audited body conform to the statutory or other authorisation under which they purport to have been carried out.”
Following the audit each auditor issues an audit opinion, an audit report and a management letter to the Chief Executive of the local authority. Included in the audit report is any matter which the auditor considers should be reported. The Chief Executive of a local authority is required to respond to this report and his/her comments are included, if of material significance, as part of the final report. This procedure has enhanced public scrutiny of local government, as management responses to address the issues raised at audit now form part of the published audit reports.
The local government auditors’ statutory reports issued to the elected members of the local authorities on the audits of the annual financial statements for 2016 are published on my Department’s website at the following link: http://www.housing.gov.ie/search/archived/current/category/local-government-audit-service/type/publications?query=.
NOAC was established in July 2014 under the Local Government Reform Act 2014 to provide independent oversight of the local government sector. Its functions are wide ranging, involving the scrutiny of performance generally and financial performance specifically, supporting best practice, overseeing implementation of national local government policy and monitoring and evaluating implementation of corporate plans, adherence to service level agreements and public service reform by local government bodies. A Government Minister may also request that NOAC prepare a report relevant to its functions on any specified aspect of local government.
As well as the LGAS and NOAC, an audit committee is now place in each local authority, so as to enhance the financial management and audit control systems in local authorities. Membership of these committees includes both elected members and expert external membership. The functions of audit committees include reviewing financial and budgetary reporting practices and procedures within a local authority; reviewing auditors’ reports and special reports, and assessing follow-up action by management; assessing and promoting efficiency and value for money, reviewing risk management systems and making such recommendations to the authority as the committee considers appropriate in respect of such matters.
Given this threefold approach, I am satisfied that there is an appropriate audit framework in place for the local government sector.
