In his fourth annual report on the accounts of Welsh councils and police bodies Huw Vaughan Thomas,  the Auditor General, highlights that half (52%) of the 61 organisations covered made material adjustments to their accounts following audit, compared to 33% of those reviewed the year before.

The report states: ‘Whilst there are often likely to be minor errors in the accounts presented for audit, material items should be much less common and such a large number undermines the certification process and bring into the questions the quality of the accounts production process.’

The WAO says public bodies should pay closer attention to ‘complex accounting areas’ and ensure they are conducting thorough quality assurance reviews before accounts are certified.

With a period of continuing financial austerity ahead, the report says local government and police bodies need to critically appraise their holding of reserves and where they can do so, factor the use of these reserves into their medium term financial plans in a sustainable manner.

The regulator also warns that audited bodies are still taking too long to prepare draft Whole of Government Accounts returns, with only  two thirds of audited returns completed by the deadline. It notes that there will have to be improvements in this area, as the Treasury is seeking to bring the deadlines for this information forward in future years.

Thomas said: ‘Completing materially accurate and timely annual accounts is essential if councils and police bodies are to develop robust medium-term financial and service delivery plans to meet the continuing financial challenges ahead.’

The report summarises the WAO’s work at Wales’ 22 unitary authorities, four police authorities, three fire and rescue authorities and three National Park Authorities, along with their pension funds and joint committees and is available here: http://www.wao.gov.uk/publication/2013-14-local-government-accounts