London Annual Accounts and External Audit Guide

This guide explains the legal framework and practical steps for preparing, publishing and auditing the annual statement of accounts for local authorities operating in London, England. It summarises statutory duties for producing statements, public inspection and the role of the appointed external auditor under the Local Audit and Accountability Act and related regulations. For the national statutory framework see the Local Audit and Accountability Act 2014 and the Accounts and Audit Regulations 2015 for England.Local Audit and Accountability Act 2014^[1]

Overview

Local authority chief finance officers (often the s151 officer) must prepare an annual statement of accounts reflecting the council's financial position. The statement must be approved, published and made available for public inspection; the external auditor then issues an opinion and any statutory reports. The governance steps and auditor engagement follow the national rules cited below and are applied by London boroughs and the City of London.Accounts and Audit Regulations 2015^[2]

Penalties & Enforcement

Statutory enforcement for failures in account production, audit cooperation or publication is governed by the national statutes and regulations cited above. Specific monetary penalties are not routinely set out at municipal level and vary by instrument; where exact fines or fixed penalty amounts are not provided on the official source page they are noted below as such.

• Monetary fines: not specified on the cited page for general local authority account failures; penalties depend on statutory offence provisions where enacted or prosecutorial discretion.^[2]
• Escalation: first, repeat and continuing offences - not specified on the cited page; remedies include reports, recommendations and legal action rather than fixed daily fines in most cases.^[2]
• Non-monetary sanctions: publication of adverse or public interest reports, statutory recommendations, court orders and requirement to correct statements; auditors may report matters to those charged with governance.
• Enforcer and inspector: the appointed external auditor enforces audit requirements; internal monitoring (section 151 officer) and the council's governance/audit committee manage compliance. Complaints and concerns may also be raised with the auditor or via the council's governance arrangements.Public Sector Audit Appointments - appointing auditors^[3]
• Appeals and review: decisions by auditors can be subject to review or judicial review in the courts; time limits for statutory notices and rights to inspect or object are set in the Accounts and Audit Regulations and local notices - see the cited regulations for precise time limits and procedures.^[2]
• Defences and discretion: councils may rely on reasonable excuse, correction and timely cooperation; auditors exercise professional judgement and may recommend remedial steps rather than impose penal fines.

Applications & Forms

The national regulations require publication of the statement of accounts and a notice of public rights; there is no single standard national application form for accounts publication on the cited pages. Specific local forms (for example internal approval checklists or council templates) are published by each authority; applicants should consult their council's finance or governance pages for the exact documents and submission methods.^[2]

Action steps

• Prepare draft accounts and working papers early and schedule audit slots with the appointed auditor.
• Publish the notice of public rights and allow the statutory inspection period required by the Accounts and Audit Regulations.
• Respond promptly to auditor queries and retain evidence for key balances and disclosures.
• If you disagree with an auditor report, seek internal review and consider legal remedies such as judicial review where appropriate.

FAQ

When must the council publish its statement of accounts?

The council must prepare, approve and publish a statement of accounts in line with the Accounts and Audit Regulations; consult the regulations and your council's published timetable for the exact dates and notice requirements.^[2]

Who inspects the accounts and how can the public object?

The appointed external auditor inspects and audits the accounts; the public exercise rights of inspection and may submit objections during the statutory inspection period as set out in the regulations.^[2]

Who appoints the external auditor for a London council?

External auditors are appointed using the national arrangements administered by Public Sector Audit Appointments or other approved appointing bodies; councils will publish the name of the appointed auditor and contact details.^[3]

How-To

1. Identify the responsible officer (s151) and confirm the council's timetable for draft accounts and audit engagement.
2. Publish the notice of public rights and make the draft accounts available for inspection for the statutory period.
3. Respond to the auditor's queries, provide working papers and correct material misstatements if identified.
4. Review any auditor reports, implement recommended remedial actions and follow appeals or legal review routes if necessary.

Key Takeaways

• Timely preparation and full audit trails reduce objections and delays.
• External auditors are independent and report publicly on significant governance concerns.
• Procedural rights and inspection periods are set by national regulations and applied by London councils.

Help and Support / Resources

• City of London Corporation - official site
• Greater London Authority - finance and accounts
• Public Sector Audit Appointments

1. [1] Legislation.gov.uk - Local Audit and Accountability Act 2014
2. [2] Legislation.gov.uk - Accounts and Audit Regulations 2015
3. [3] Public Sector Audit Appointments - Appointing auditors