Local authorities in Wales are to see changes in the way they are audited after a report by the Auditor General for Wales identified 'systemic weaknesses in financial management and governance' in a large number of community and town councils.

The report says local accounts are often not submitted for audit on time and many are of poor quality. In 2012, up to 40% of community and town councils were late submitting their accounts; almost one in seven did not submit for audit a completed annual return and one in ten of submitted accounts needed correction. Auditors issued qualified audit opinions at 130 local councils (17%).

As a result, the Auditor General said he has decided to modify the way local councils are audited for the 2015-16 accounts and onwards to encourage a stronger emphasis on governance and public reporting.

Under the modified arrangements, local council audits will include a thematic review of governance arrangements. Community and town councils will be notified in advance of the specific areas to be examined so they can make any necessary improvements before the start of the financial year.

Huw Vaughan Thomas, Auditor General for Wales, said: 'I am concerned about the persistent failure of community and town councils to publish an audited annual return on a timely basis. In my view, it is unacceptable that local councils, funded by public money, should fail to discharge their legal obligations and prepare statements of accounts for audit. The number of qualified opinions are also far too high. My new audit arrangements should help local councils focus more clearly on fulfilling their financial responsibilities to the standards I, and the people of Wales, expect.'