Agenda Item No 8
The Vale of Glamorgan Council
Audit Committee 24th February 2015
Report of the Head of Finance
Audit Committee - Accounts and Audit (Wales) Regulations 2014
Purpose of the Report
1. To provide Members with an update on the changes to the Accounts and Audit (Wales) Regulations.
1. THAT Members note the changes to the regulations as set out in the report.
Reason for the Recommendation
1. To keep the Audit Committee informed and to ensure Members of the Committee are fully aware of legislative changes which impact on the finance and audit function.
2. The current Accounts and Audit (Wales) Regulations 2005 (as amended) provide the regulatory regime underpinning the financial reporting and accounting of local government bodies in Wales.
3. Welsh Government have now revoked and replaced these regulations (including Statutory Instrument 2007, 2010 and 2013 with the Accounts and Audit (Wales) Regulations 2014 which come into force on 31st March 2015 and will affect the completion of the 2014-15 financial accounts.
Relevant Issues and Options
4. The 2014 Regulations differ in a number of respects from previous Accounts and Audit Regulations. Of particular note among the changes are the following:
To assist relevant bodies to identify how the provisions apply to them and what is required of them; a change to the presentation of the Regulations has been made. To facilitate this, the types of relevant bodies are separated into 2 broad areas. Firstly, "larger relevant bodies" - those required to follow accounting practices contained in the Chartered Institute of Public Finance & Accountancy (CIPFA) Code of Practice and have the freedoms provided by the prudential system of capital controls set out in part 1 of the Local Government Act 203. Secondly, "smaller relevant bodies" - those permitted by the existing Regulations to prepare simpler published accounts and who are subject to less demanding procedural requirements. Relevant bodies are now identified specifically in the Regulations, rather than by reference to other pieces of legislation providing more clarity.
The increase in the threshold of gross income or gross expenditure for smaller relevant bodies, from £1 million per year to not more than £2.5 million;
Changes to the procedures for approving and publishing accounts;
The separation of procedures governing published accounts and audit for larger relevant bodies from that for smaller relevant bodies in the structure of the Regulations; and
It is no longer an offence to fail to comply with any aspect of the Regulations.
5. Attached at Appendix A for Members information is a summary of the contents of the Accounts and Audit (Wales) Regulations 2014 and the Statutory Instrument at Appendix B.
Resource Implications (Financial and Employment)
6. None as a direct consequence of this report.
Sustainability and Climate Change Implications
7. None directly from this report
Legal Implications (to Include Human Rights Implications)
8. Provision of an adequate and effective Internal Audit function is a legal requirement under the Accounts and Audit (Wales) Regulations 2005 as amended and now as contained within the Accounts and Audit (Wales) Regulations 2014.
Crime and Disorder Implications
9. Pursuing initiatives to prevent, detect and deter crime is encompassed within the terms of reference under which the audit function operates.
Equal Opportunities Implications (to include Welsh Language issues)
10. None as a direct consequence of this report.
11. The work of audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
12. The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
13. No further consultation is proposed.
Helen Smith - Operational Manager - Audit Tel: 01656 754901
External Audit Manager - Grant Thornton UK LLP
Alan Jenkins - Head of Finance and Section 151 Officer