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Local authority accounts:
A guide to your rights
GUIDE
by the
National Audit Office
AUGUST 2021
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As a local resident you have
legal rights to inspect, ask
questions about and challenge
items in your authority’s accounts
This guide covers your rights under the Local Audit and
Accountability Act 2014, which applies for the audit of
accounts for 2015-16 onwards.
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Contents This document can be found
on the National Audit Office
website at www.nao.org.uk
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Summary 4 format, contact the NAO at
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Part One
Inspecting accounts 7
Part Two
Concerns about something If you have any enquiries
other than accounts 22 regarding this document,
email: LACG@nao.org.uk
Annex or write to us at:
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4 Summary Local authority accounts: A guide to your rights
Summary
Local authorities and their accounts
Local authorities spend public money. The money comes from national and local
taxes as well as charges to service users. Local authorities must tell local residents
and taxpayers how their money is spent. They do this by publishing yearly accounts
and details of their spending.
Parts One and Two of this guide relate to all local authorities, large or small. There
are, however, slightly different provisions in relation to smaller local authorities and
if you are interested in finding out about your rights in relation to an authority within
that category, please read the Annex, in addition to Parts One and Two.
Smaller authorities are defined under the 2014 Act as those local authorities where
the higher of gross income or expenditure does not exceed £6.5 million for the
relevant financial year or either of the two previous years.1
Local authority accounts are the financial statements that most organisations must
produce at the end of the year. At larger authorities these include a balance sheet
and summary of income and expenditure along with supporting notes that give more
details. The term also includes related documents used to make up the authority’s
accounts and any report by the auditor.
Smaller authorities publish an annual return that includes a summary of the authority’s
income and expenditure (or receipts and payments), its assets and other balances.
All authorities also complete an annual governance statement setting out the
arrangements they have in place to ensure that the authority and its business
is properly managed.
Your rights and the law
The Local Audit and Accountability Act 2014 (the Act) governs the work of auditors
appointed to authorities and other local public bodies. The Act the Accounts and
Audit Regulations 2015 and the Local Audit (Public Access to Documents) Act 2017
also cover the duties, responsibilities and rights of local authorities, other
organisations and the public concerning the accounts being audited.
1 If the relevant financial year is the year in which the authority is established then clearly only that year is relevant;
if the authority is two years old, then it will be a smaller authority if it was under the £6.5 million threshold for either
of the two financial years during which it has existed.
Local authority accounts: A guide to your rights Summary 5
As a local resident or an interested person or journalist (these terms are explained
further on page 7) you have certain legal rights in respect of the accounts of
local authorities.
As an interested person or journalist you can inspect an authority’s accounts and
related documents. If you are a local government elector for the area to which the
accounts relate you can also:
• ask the auditor questions about the accounts; and
• object to them (this term is explained later in theguide).
Your rights to inspect the accounts and related documents, ask questions or make
objections, however, can only be exercised during a single 30 working-day period
that is set by the authority (‘the inspection period’). It is vital, therefore, that if you
intend to exercise any of the rights explained in this guide, you contact the authority
to find out the dates set for the inspection period each year. It is the authority which
sets this period, not the auditor.
You do not have to pay directly for exercising your rights. However, any resulting
costs incurred by the authority (which can on occasion be very large) form part
of its running costs.
Therefore, indirectly, local residents pay for the cost of you exercising your rights
through their council tax. Please bear this in mind if the issue of concern could be
dealt with in a more proportionate way, such as by direct communication with the
authority or via an organisation listed in Part Two.
About this guide
This guide:
• explains what your rights are and how to use your rights responsibly;
• explains what the law says about local authority accounts and your rights; and
• gives sources of advice and information for concerns about your local authority
that do not relate to the accounts.
6 Summary Local authority accounts: A guide to your rights
Part One shows you how to inspect, ask questions, and object to accounts. To ask
the auditor a question or make an objection about accounts, you need to know:
• who the authority’s auditor is (see page 10);
• your legal rights;
• when you can exercise them;
• what an auditor can and cannot do; and
• the costs involved.
You may want to know something about your local authority which is not related to
their accounts. Part Two gives contact details for bodies that may be able to help you.
The Annex, as mentioned above, sets out the arrangements relevant to smaller
authorities where these differ.
If you just want information about your local authority’s income or spending, first
ask the authority. Most local authorities publish details of their spending on their
websites. If you do not have internet access, you can ask the authority to send
you a copy of what they publish.
You might want to tell someone your view of how the authority runs its services.
You can, without exercising legal rights, tell the authority about these issues at
any time.
If you are concerned about the way in which the authority is managing its business
or finances, or are dissatisfied with the action the authority has taken in response to
an issue you have raised, you can bring your concerns to the attention of the auditor
at any time, and not just in the inspection period. Where possible, though, it is best
to raise your concerns with the authority and attempt to resolve the issue first.
In this guide we refer to ‘local authority accounts’ throughout. Your rights also
apply to other local public bodies as set out in Schedule 2 to the Local Audit and
Accountability Act 2014. For example, in addition to local authorities, your rights
apply to bodies such as fire and rescue authorities, police and crime commissioners,
national park authorities, combined authorities and internal drainage boards.
References to ‘the auditor’ should also be read to mean the external auditor,
unless explicitly stated otherwise.
Please note that none of the rights described in this guide apply to the accounts
of any NHS body.
Local authority accounts: A guide to your rights Part One 7
Part One
Inspecting accounts
This section of the guide covers inspecting the accounts and supporting records,
asking questions about the accounts and objecting to accounts. If you are reading
this guide in connection with an issue at a smaller authority, you should also read
the Annex at the back of this guide. The Annex contains additional information
specifically relating to smaller authorities. You can find a definition of a smaller
authority in the summary section on page 4 of this guide.
Objecting to your authority’s accounts is a serious matter. It’s therefore a good
idea to have thought about inspecting the accounts and associated records and
asking the authority questions first. It may be that the issue can be resolved
without making an objection.
Q: Who can inspect the accounts and accounting records?
A: Any interested person or journalist can inspect the accounts during the
inspection period, which includes but is not limited to local electors. Local electors
have further rights to ask the auditor questions about the accounts, and to object
to them, that are not open to interested persons or journalists.
Whether or not someone is an interested person is a matter of law, so a person
is not ‘interested’ for these purposes just because they say they are. However,
persons with a connection to the area will often be interested persons, for example
business-rate payers or those who pay fees and charges to the authority.
The Local Audit (Public Access to Documents) Act 2017 extends public inspection
rights to journalists. The Act defines a journalist as “any person who produces for
publication journalistic material (whether paid to do so or otherwise)”.
Q: What can I inspect?
A: You can inspect your authority’s accounts, any related documents, and,
if a local elector, any report the auditor made in that financial year.
The law says you may inspect the accounts to be audited and all books, deeds,
contracts, bills, vouchers and receipts relating to them for that financial year.
You can copy all, or part, of these accounts and related documents (but you
may have to pay for copies).
8 Part One Local authority accounts: A guide to your rights
Q: Are there limits to what I can inspect?
A: Yes. The law limits what you can inspect or copy.
Your inspection must be about the accounts, or relate to an item in the accounts.
You cannot, for example, inspect or copy documents unrelated to the accounts,
or that include personal information about staff.
An exception to this is that there will be information in the statement of accounts
relating to senior employees’ salary and benefits and you can ask to see the
relevant entries in the statement. A senior employee is someone earning more than
£150,000 a year, or someone earning at least £50,000 a year and holding a senior
management position in the authority.
You may also not be able to inspect information which is protected by commercial
confidentiality. This is information which would prejudice commercial confidentiality
if it was released to the public and there is not, set against this, a very strong reason
in the public interest why it should nevertheless be disclosed.
Q: When can I inspect the accounts and accounting records?
A: When authorities have finished preparing accounts for the financial year they
must make them available for inspection. There must be a 30 working-day period,
called the ‘inspection period’ or the ‘period for the exercise of public rights’, during
which you can exercise your statutory right to inspect the accounts.
Authorities must tell the public, including putting the information on their website
(unless it is a smaller authority without a website – see the Annex), that the accounts
and related documents are available to inspect. You will then have 30 working days
to inspect the accounts. This is a strict period which the auditor has no power to
extend. It is extremely important therefore that you do not delay inspecting the
authority’s accounts, particularly if you intend to either ask the auditor a question
or make an objection. You will have no right of inspection of the unaudited accounts
outside of this limited period. It is therefore best to contact the authority direct to
find out when their inspection period starts and finishes.
The information which the authority publishes must set out the dates of the period
for the exercise of public rights, how you can communicate to the authority that
you wish to inspect the accounts and related documents, the name and address
of the auditor, and the relevant legislation that governs the inspection of accounts
and objections.
Local authority accounts: A guide to your rights Part One 9
Q: Where can I inspect the accounts and accounting records?
A: Local authority accounts are important and valuable documents and must
be safeguarded. You will usually have to inspect them at the authority’s offices.
You can ask the authority to send you copies of documents, but you may have
to pay. Authorities may also charge you for copying any documents.
Q: Can anyone help me to inspect the accounts and accounting records?
A: Yes. You can ask someone to help you.
You can ask another person to go with you to inspect the accounts. This person
does not have to live in the area covered by your authority. You must tell the
authority in good time that someone will go with you.
Q: What if I am denied my inspection rights?
A: If you disagree with an authority about your inspection rights or cannot access
the documents you want to inspect, first try to resolve this with the authority.
Nobody should try to stop you from inspecting and copying documents, but as with
all dealings with the public sector, given the cost to local taxpayers, it is advisable
that you act reasonably.
Acting reasonably includes agreeing a time to inspect documents that suits the
authority as well as you.
Acting reasonably also means being responsible and specific about what you
want to inspect.
Q: Can the auditor help me to use my rights to inspect the accounts?
A: No. Your right to inspect the accounts is personal and only in relation to
the local authority, which means the auditor cannot get involved.
The auditor has no role in enforcing inspection rights (similarly, the NAO cannot
intervene). You can ask the Citizens Advice Bureau for help, or a solicitor to
enforce your rights. If this does not work, you may go through the courts.
Inspection rights are covered by Section 26 of the Act and the Accounts and Audit
Regulations 2015.
10 Part One Local authority accounts: A guide to your rights
Asking questions of the auditor about the accounts
Q: Who can ask questions about the accounts and accounting records?
A: Anybody can ask the auditor a question, but only local electors can ask
questions formally. You should first however ask your authority about the accounts
as that is the most efficient way of addressing any issues. If you are a local elector,
you can also ask the auditor.
Your right to ask questions of the auditor is enshrined in law. However, while the
auditor will answer your questions where possible, they are not always obliged
to do so – which is another reason for asking the authority first. So, for example,
the question might be better answered by another organisation, require investigation
beyond the auditor’s remit, or involve disproportionate cost (which is borne by the
local taxpayer).
Q: Who can answer questions about the accounts and accounting records?
A: Give your authority the opportunity first to explain anything in the accounts
that you are unsure about.
If you are not satisfied with the council’s explanation, you can ask the auditor to
explain points in the accounts. The law limits the time available for you formally to
ask questions. This must be done in the inspection period, so let the auditor know
your concern as soon as possible.
Q: How can I find out who the auditor is?
A: In this guide ‘the auditor’ is the auditor appointed to the authority.
The table below sets out the arrangements for 2018-19 onwards:
Financial year Local authorities, except smaller Smaller authorities
authorities
2018-19 onwards Local authorities are free to Appointments made
appoint their own auditor, by Smaller Authority
or may opt-in to a collective Audit Appointments
scheme. Appointments for Ltd (SAAA).
opted-in authorities will be
made by Public Sector Audit
Appointments Ltd (PSAA).
Local authority accounts: A guide to your rights Part One 11
To find out who the auditor is you can:
• ask your authority;
• look at the PSAA website (www.psaa.co.uk);
• email PSAA at auditorappointments@psaa.co.uk;
• look at the SAAA website (www.localaudits.co.uk);
• Phone SAAA on 020 7543 5867; or
• email SAAA at admin@localaudits.co.uk
You will need to know to which financial year your issue relates in order to identify
the correct contact.
Q: When can I ask the auditor questions about the accounts?
A: The advertisement or notice that tells you the accounts are available to inspect
will also give the period for the exercise of public rights during which you may ask
the auditor questions, which here means formally asking questions under the Act.
You can formally ask the auditor questions about the accounts, under the Act,
during the period for the exercise of public rights.
You can ask someone to represent you when asking the auditor questions. Before
you ask the auditor any questions, you should inspect the accounts fully, so you
know what they contain.
Please remember that you cannot formally ask questions, under the Act, after
the end of the period for the exercise of public rights. You may ask your authority
questions about their accounts for any year, at any time. But these are not questions
to the auditor under the Act.
Q: What questions can I ask about the accounts?
A: You can ask the auditor questions about an item in the accounts for the
financial year being audited. However, your right to ask the auditor questions
is limited. The auditor can only answer ‘what’ questions, not ‘why’ questions.
The auditor cannot answer questions about the authority’s policies, finances,
procedures or anything else unless it is directly relevant to an item in the accounts.
Remember that your questions must always be about facts, not opinions. To avoid
misunderstanding, we recommend that you always put your questions in writing.
12 Part One Local authority accounts: A guide to your rights
Q: Can the auditor raise my question with the authority for me?
A: No. The auditor cannot ask the authority questions for you or give you
the authority’s answers.
The auditor acts independently of electors and the authority when auditing
the accounts. So the auditor will not ask the authority questions on your behalf.
For questions that are not about the accounts, the auditor will suggest that you
ask the authority for the information you want.
Q: Will the auditor answer my question about whether something in the
accounts is lawful?
A: The fact that you disagree with something your authority has done, or intends
to do, does not necessarily mean it is unlawful. The auditor considers the legality of
items of account brought to their attention but does not have to answer questions
about whether something the authority has done, or an item in its accounts,
is lawful.
When thinking about asking questions, remember that authorities can usually decide
the best way to do things within the law. An auditor will, in turn, normally only look
into an authority’s policies, or decisions, if there is a clear indication of unlawfulness.
If you believe that something in the accounts is unlawful, you should refer to the
following section on ‘objecting to accounts’.
Asking the auditor questions about the accounts is covered by Section 26 of the Act.
Local authority accounts: A guide to your rights Part One 13
Objecting to accounts
If after inspecting the accounts and asking questions you are concerned about
something in the accounts, you may wish to object to the accounts. Examples of
concerns that might be appropriate for an objection are where in your view, there is
an item in the accounts that is unlawful; there are issues relevant to the authority’s
arrangements for securing value for money or that are referred to in an authority’s
annual governance statement; or there are serious matters of wider concern, for
instance around corporate governance, arising from the authority’s finances.
Remember you can only make an objection within the inspection period; the
auditor has no discretion to extend this period. It is really important, therefore,
that you do not delay corresponding with the auditor. If you leave this to the last
minute and submit an ineligible objection, there may not be time to re-submit an
eligible objection before the end of the inspection period, and you may lose your
right to object.
Q: Who can object to the accounts?
A: You can only object to the accounts if you are an elector for the body in
question; that is to say you must be registered on the electoral register for the
geographical area covered by the authority.
Q: What is an objection to the accounts?
A: A local government elector can ask the auditor to apply to the High Court for
a declaration that an item of account is unlawful, or to issue a report on matters
which are in the public interest (‘a public interest report’).
You must, so far as is possible, tell the auditor in writing which item in the accounts
you object to and why you think the item is unlawful, or why you think that a public
interest report should be made (providing the relevant details about the issue,
where possible). Simply disagreeing with the merits of any decision taken regarding
income or spending does not make it unlawful.
An unlawful item of account is one that, for example, records spending or income
that the authority:
• spent or received without powers to do so;
• took from, or added to, the wrong fund or account; or
• spent on something that it had the power to spend on, but the decision
to spend the money was wholly unreasonable or irrational.
‘Unreasonable’ has a special meaning in law in this context and is a high threshold.
An authority acts ‘unreasonably’ when its actions are so wholly unreasonable that
no reasonable person could have made that decision. This is sometimes called
acting ‘irrationally’.
14 Part One Local authority accounts: A guide to your rights
You may want to raise issues relating to matters that the auditor might consider
issuing a report in the public interest. This could include issues relevant to the
authority’s arrangements for securing value for money, matters that are referred to
in an authority’s annual governance statement, or matters of wider concern arising
from the authority’s finances. Again, the auditor will not take action simply because
you disagree with any income or spending, nor is the auditor likely to get involved
where you argue that particular spending is not value for money. The auditor’s
concerns will be with the adequacy of the authority’s general arrangements for
securing value for money.
Auditors have a range of ways in which to bring matters of concern to the attention
of authorities and to then take steps to follow up on any recommendations.
The Code of Audit Practice requires auditors to consider what would be the most
appropriate and effective means of reporting. When doing so, auditors consider
issues such as:
• the significance of the matter or weakness in arrangements;
• whether the body already recognises the need to address the matter and is
taking appropriate action;
• what information is already in the public domain and whether further reporting
to bring the matter to the attention of the public is appropriate;
• which form of reporting is likely to be most effective in helping the audited body
to understand the significance of the matter and the need to take action; and
• whether previous reporting has been acted upon and, if not, whether more
prominent reporting – such as issuing a statutory recommendation or a report
in the public interest – is now necessary.
It is therefore possible that even where the auditor has considered an objection
and finds in favour of the objector they may consider a different response to be
more appropriate to the particular circumstances – or more cost-effective – than an
application to a court for a declaration or a report in the public interest.
Local authority accounts: A guide to your rights Part One 15
Q: How do I object to the accounts?
A: To object to the authority’s accounts you must write to the auditor stating you
want to make an objection, including the information and evidence below and you
should also send a copy to the authority.
The notice should include:
• confirmation that you are an elector in the authority’s area;
• why you are objecting to the accounts and the facts on which you rely;
• details of any item in the accounts that you think is unlawful;
• the grounds on which you believe any item is unlawful;
• details of any matter you think the auditor should make a public interest
report about; and
• what you would like the auditor to do (see the next question).
The notice must be in writing. You also need to provide the auditor with evidence
to support your objection. On receipt of your notice, however, the auditor will be
deciding only whether they will accept your objection for further consideration.
You may therefore not need to provide the auditor with all of the information or
evidence you have at this stage. A summary of key points including details of
amounts involved may well be sufficient and will enable the auditor to reach a
decision over whether to consider your objection more quickly. Should the auditor
decide to accept your objection for consideration, they may then ask you for any
remaining information or evidence you have gathered.
You can ask someone to represent you and deal with your objection. This person
does not have to live in the area covered by your authority.
Q: What can I ask the auditor to do about my objection?
A: You should say which power or powers you would like the auditor to consider
using to deal with your objection. You can only ask the auditor to act within the
powers available under the Local Audit and Accountability Act 2014.
If you are objecting you should specifically ask the auditor to do either or both
of the following:
• issue a report in the public interest; and/or
• apply to the courts for a declaration that an item of account is against the law.
Each of these options is explained below.
16 Part One Local authority accounts: A guide to your rights
Q: What does it mean if an auditor issues a public interest report?
A: The auditor can report ‘in the public interest’.
When an auditor exercises their discretion to report in the public interest, there
are actions that the authority must take. On receipt of a public interest report, the
authority must publish the report on its website (or if it does not have one, in another
way likely to bring it to the attention of people who live in its area), call a public
meeting to consider the auditor’s report and any recommendations in it.
The authority must consider and respond publicly within a short time frame of
receiving a public interest report, usually a month. Please note that although an
authority must consider a public interest report, once they have complied with the
procedural steps as outlined above (holding a public meeting etc.) they are not
required to take any action in relation to the contents of the report. In other words,
the authority is entitled to disagree with the conclusions set out in the report.
The auditor can send the public interest report to anyone they see fit, including the
media and other local or national public bodies. The auditor must also send a copy
to the relevant Secretary of State.
Reporting in the public interest is covered by Schedule 7 of the Local Audit and
Accountability Act 2014 and Chapter 5 of the 2015 Code of Audit Practice.
Previously published public interest reports are available on the Audit Commission’s
archived website and PSAA website.
Q: What does it mean for an auditor to apply to the court for an item of account
to be declared unlawful?
A: If the auditor thinks that income or expenditure in the accounts is unlawful,
they can apply to the court for a judge to give a declaration to that effect.
If the court agrees with the auditor, it can make this declaration and can order the
authority to correct the accounts.
When deciding whether to apply for a judge’s declaration, the auditor must consider
several matters. These include weighing the possible public interest benefits of
going to court against the likely costs. The costs of going to court are high and
there needs to be a considerable public interest involved before this outweighs
the legal costs of applying to court. If the authority decides to argue against the
auditor’s view in court, then the costs to the local taxpayer will also include the
authority’s legal fees.
Making a declaration is covered by Schedule 7 of the Local Audit and Accountability
Act 2014 and Chapter 5 of the 2015 Code of Audit Practice.
Local authority accounts: A guide to your rights Part One 17
Q: What do I do with my written objection?
A: Send it direct to the auditor, no later than the end of the period for the exercise
of public rights (see page 5).
You must also send a copy of your written objection to the authority. If you do not,
the auditor will not be able to act on it.
If your objection has personal or sensitive information (for example, about you or
someone in the authority) mark it as ‘Private and Confidential – for the attention
of the Chief Executive (or the Clerk, in parish and town councils)’.
You cannot use the objection process to make a personal complaint or claim
against an authority.
Q: What will the auditor do with my written objection?
A: The auditor will first consider whether your objection meets the statutory
eligibility requirements.
Before the auditor can deal with your objection, they must confirm
(see page 14) that:
• the objection was made within the inspection period (see page 8);
• you are a local elector of the area the accounts relate to; and
• the objection relates to an item in the year of account for which the audit
is still open.
The auditor will look at your objection. Neither the auditor nor the court can challenge
an authority’s decision if it is lawful, but the auditor may decide to use their additional
reporting powers, such as a statutory recommendation or a report in the public
interest, to highlight governance or value-for-money issues.
After first deciding whether your objection is eligible (that is, it meets the statutory
requirements to be a valid objection), the auditor will then decide in their discretion
whether they will accept the objection for consideration.
Even where the objection is eligible, the auditor has a broad discretion as to whether
or not to accept it for consideration. This will broadly depend on whether you
have raised something in relation to which the public interest is such that further
investigation/action is justified. The grounds, among others, on which they may
decide not to pursue the objection include:
• the cost of dealing with it would be disproportionate to the underlying sum
(item of account) to which it relates;
• that it is frivolous or vexatious; and/or
• it is a repeat of an objection made in a prior year of account.
18 Part One Local authority accounts: A guide to your rights
If the auditor decides not to go ahead with the objection, they will usually give brief
reasons for their decision. You have a legal right to appeal against the auditor’s
decision not to go ahead with the objection. If you decide to do this you are
strongly advised to secure your own legal advice and representation.
Q: What happens next?
A: If your objection is accepted for consideration the auditor will decide
appropriate next steps.
The auditor will decide if the matter you raised needs investigation and then whether
a High Court declaration should be sought or a public interest report be issued.
If the matter does not warrant either of these outcomes, it may still be a matter that
the auditor may wish to raise with the authority by way of recommendations or to
consider as part of their routine planned audit work.
The auditor will look objectively at the evidence that an item of account may be
unlawful or any other issues you have raised that could be the subject of a public
interest report. Disagreeing with something your authority has done, or intends to
do, does not necessarily mean it is unlawful.
Q: How does the auditor consider my objection?
A: In everything they do, auditors must follow the Act, the 2015 Code of Audit
Practice and any statutory guidance issued in support of the Code (a new Code of
Audit Practice was published in 2020 for financial years 2020-21 onwards). Under
the Code of Audit Practice, the auditor must take a balanced approach in spending
time and money examining an objection.
The auditor will consider:
• how significant the matter is;
• whether there is wider public interest in the issues you raised;
• whether they, or another auditor, have previously considered the matter;
• whether the substance of the matter falls within the scope of work conducted
by an inspectorate or other body;
• the costs of dealing with the matter; and
• your rights, and the authority’s, individual councillors’ and authority
officers’ rights
The auditor will usually write to you to say how they have dealt with your objection
and the outcome.
Local authority accounts: A guide to your rights Part One 19
Q: Can I appeal against the auditor’s decision about my objection?
A: Yes, in certain circumstances, but you should take legal advice as you may
have to pay costs.
When the auditor decides not to accept your objection or that they will not take any
formal audit action, they will usually explain their reasons in writing.
If reasons have not been given and your objection is that an item in the accounts is
unlawful (as opposed to asking for a public interest report), you can ask the auditor
for the reasons in writing.
If you have asked the auditor to apply to the court for a declaration that the item
of account is unlawful and you disagree with the auditor’s decision either not to
consider your objection, or not to seek a declaration, you can appeal but you will
have to take the matter to court yourself.
If you have asked the auditor to issue a report in the public interest and they decide
not to do so, you cannot appeal that decision.
The time limit for an appeal is 21 days, so you should get legal advice as soon
as possible.
An appeal can be expensive. We strongly recommend that you take legal advice on
the strengths of your case and the financial risk involved before lodging an appeal.
You may, if your appeal is not upheld, have to pay all of your costs associated with
the appeal, and may also be ordered to pay the auditor’s and authority’s legal costs.
Your right to object to the accounts is covered by Section 27 (but see also Schedule 7)
of the Local Audit and Accountability Act 2014.
Q: Other than the legal power(s) I have asked the auditor to use, does the auditor
have any other powers?
A: Yes.
The auditor can also consider whether to do any or all of the following:
• make a recommendation under Schedule 7 of the Act which the authority must
consider and respond to publicly;
• make other recommendations to the authority they consider appropriate;
• issue an advisory notice; and/or
• apply for a judicial review of the authority’s actions.
These four actions are explained below.
20 Part One Local authority accounts: A guide to your rights
Q: What does it mean if an auditor issues a Schedule 7 recommendation?
A: The auditor has legal powers to make Schedule 7 recommendations to the
authority about any matter related to the audit of the accounts.
The auditor’s Schedule 7 recommendations can be in a letter responding to the
objection, a public interest report or within other reports that they produce.
The authority must consider and respond to Schedule 7 recommendations.
More information on these recommendations can be found in Schedule 7 of the Local
Audit and Accountability Act 2014 and Chapter 4 of the 2015 Code of Audit Practice.
Q: What other recommendations can the auditor make?
A: The auditor can issue recommendations arising from the work they have
undertaken as part of the objection process.
In addition to their power to issue Schedule 7 recommendations as explained above,
auditors may decide to issue other recommendations in light of the work they have
undertaken while considering the matter or objection. These recommendations,
made under Section 27 of the 2014 Act, differ from ‘Schedule 7’ recommendations,
in that they do not require the authority to take specific actions as a result of
receiving them, but the auditor would expect them to be considered by the authority
as would be the case with any other audit recommendations during the year.
The auditor may choose to issue either type of recommendation, or both types, in
response to their consideration of a matter. Equally, they may choose not to make
any recommendations at all.
Q: What does it mean if the auditor issues an advisory notice?
A: The auditor can issue an advisory notice if they have reason to believe an
authority or an officer of the authority:
• is about to make, or has made, a decision that involves, or would involve,
the body incurring unlawful expenditure;
• is about to take, or has begun to take, a course of action which, if continued to
its conclusion, would be unlawful and likely to cause a loss or deficiency; or
• is about to enter an item of account, the entry of which is unlawful.
The effect of the advisory notice is to provide the authority with some time for
officers and members to reconsider their proposed actions and in appropriate cases,
get professional advice. If it has not done so already, the authority can ask for a
second opinion.
Issuing an advisory notice is covered in Schedule 8 of the Local Audit and
Accountability Act 2014.
Local authority accounts: A guide to your rights Part One 21
Q: What does it mean if the auditor applies for judicial review?
A: If matters are serious enough, and other additional powers (as discussed
above) are inadequate or considered inappropriate, the auditor can decide to
apply to the court for judicial review.
Only a judge can decide whether an authority’s decision, or failure to decide
something it should have, is unlawful.
The auditor can apply for judicial review on any authority decision, or authority
failure to act, which it is reasonable to believe would affect the authority’s accounts.
Judicial review is covered by Section 31 of the Local Audit and Accountability
Act 2014.
Q: How much will any of the above matters cost and who pays?
A: Unless you appeal or get your own legal advice, there will be no direct cost to
you. However, the auditor and the authority will spend time answering questions
or considering objections. The authority pays for the auditor’s time, which can
sometimes be significant. Some objections require significant time to be spent
by the authority finding information and answering questions about the objection,
which may divert resources away from other services.
As authorities generally meet their own and the auditor’s costs of dealing with
questions and objections, this can affect all local taxpayers in the community
if it has an impact on the level of council tax the authority needs to raise.
It’s therefore worth considering whether there may be a more proportionate and
cost-effective way of dealing with your issue – for instance, dealing directly with
the authority or via another body – before raising an objection. Further information
is contained in Part Two.
22 Part Two Local authority accounts: A guide to your rights
Part Two
Concerns about something other than accounts
If you work for a council and suspect fraud
This section of the guide contains suggestions for actions you might take, or other
organisations you might wish to contact, if you have concerns about something
other than the accounts. If you are reading this guide in connection with an issue
at a smaller authority, you should also read the Annex at the back of this guide.
The Annex contains additional information specifically relating to smaller authorities.
You can find a definition of a smaller authority in the summary section on page 4 of
this guide.
The Public Interest Disclosure Act 1998 (PIDA) is popularly known as a
‘whistleblowers’ protection act. PIDA provides a right of redress in the event of
victimisation or dismissal if workers raise their concerns in the ways specified
in the legislation.
Whistleblowers can claim protection under PIDA by disclosing their concerns
either to their employer or, if they prefer, to another organisation authorised to
receive disclosures (a ‘prescribed person’). The Comptroller and Auditor General
is a ‘prescribed person’ under PIDA to whom persons can make disclosures about
the proper conduct of public business, value for money or fraud and corruption in
relation to the provision of public services.
The Comptroller and Auditor General has a confidential public interest disclosure
line for public service employees where they cannot, or do not want to, report to
their employer. The Comptroller and Auditor General is supported by the National
Audit Office (NAO) in exercising their responsibilities. If you wish to contact the NAO,
you can call the dedicated Whistleblowers’ Hotline on 020 7798 7999.
Prescribed person status does not convey any powers to such persons to investigate
matters that are disclosed to them, beyond such powers as they may already have
as part of their core statutory functions.
Local authority accounts: A guide to your rights Part Two 23
Complaints
If you think something has gone wrong at your authority, you should contact them.
You can do this by writing to:
• the Chief Executive (or in parish and town councils, the Clerk); or
• your local councillor.
Most authorities have a complaints-handling system, which deals with nearly all
complaints. Occasionally there are issues that someone else needs to deal with.
Here are some suggestions to help you.
Public Sector Audit Appointments Limited (PSAA)
If you are unhappy with how the auditor has handled your question or objection about
an authority’s accounts, you should contact the audit firm and make a formal complaint.
If, having followed the firm’s complaints procedure, you remain unhappy with the
actions the auditor has taken, or the firm’s response to your complaint, you can
contact PSAA.
Phone: 020 7072 7445
Email: auditorappointments@psaa.co.uk
Smaller Authority Audit Appointments Limited (SAAA)
In respect of auditors’ work on annual returns for smaller authorities from 2017-18
onwards, if you are unhappy with how the auditor has handled your question or
objection about a authority’s accounts, you should contact the audit firm and make
a formal complaint.
If, having followed the firm’s complaints procedure, you remain unhappy with the
actions the auditor has taken, or the firm’s response to your complaint, you can
contact SAAA.
Phone: 020 7543 5817
Email: admin@saaa.co.uk
Local Government and Social Care Ombudsman
Contact the Ombudsman if you:
• think the way your council has gone about something is wrong;
• think the impact of a decision it has made is unfair; or
• are dissatisfied with how the authority has dealt with your complaint.
Please note, however, that the Ombudsman cannot deal with complaints about
parish and town councils.
Phone: 0300 061 0614
Website: Local Government and Social Care Ombudsman
24 Part Two Local authority accounts: A guide to your rights
Fraud
Contact the authority’s internal auditor if you think the authority has committed fraud
or used money improperly. Your authority will give you the internal auditor’s name
and address. If you have evidence of fraud, you should also contact the police.
Freedom of information
Your authority is covered by the requirements of Freedom of Information legislation,
so you can ask to see anything you want to see at any time. Your authority will tell
you if there is a reason you may not see any information. If you need help getting
information, the Information Commissioner may be able to help you.
Information Commissioner’s Office
Website: Information Commissioner
Helplines: 0303 123 1113
Standards committees
Complain to the authority’s standards committee, if your authority has one (or it may
be a committee with a different name), if you think a councillor’s behaviour is below
the high standards expected. Standards committees publish their own information
on how to make a complaint. They only deal with complaints about members
(councillors) and not about officers or other employees.
If your complaint is about a parish or town councillor, contact the standards
committee of the authority that collects your council tax.
You can make a complaint about a member of other local public bodies such as
fire authorities, national park authorities and passenger transport authorities.
These local public bodies often have their own standards committees. If they
do not have a committee or you cannot find the committee’s address, send your
complaint to the main office of the local public body.
Personal claims
Contact your local Citizens Advice Bureau, local law centre or a solicitor if you
have a personal claim against the authority. The Law Society has a list of solicitors
in your area.
Local authority accounts: A guide to your rights Annex 25
Annex
Specific arrangements for smaller authorities
Smaller authorities are defined under the 2014 Act as those local authorities where
for the relevant financial year or either of the two previous years (or one or two
years if the body has existed for less than three years) the higher of gross income
or expenditure does not exceed £6.5 million. In this section, all references to ‘the
authority’ refer to smaller authorities.
In almost all respects, your rights as set out in the main part of this guide are
unchanged where the authority in question is a smaller authority. However, the
nature and scope of the work carried out by the auditor differs according to the
type of authority.
Smaller authorities are subject to a limited assurance review, which is not a ‘full’
audit, and is proportionate to the size and undertakings of the authority. Auditors
review the authority’s annual return (consisting of an annual governance statement
and statement of accounts) in accordance with guidance issued by the NAO on
behalf of the Comptroller and Auditor General. Their work does not constitute an
audit carried out in accordance with International Standards on Auditing and does
not provide the same level of assurance.
All smaller authorities are required to publish their annual return locally, including
on a website. Certain types of smaller authorities that do not have their own
websites must still inform the public of the inspection period on a website, but this
website does not have to be their own. It must, however, be publicly accessible
without having to register or pay. Parish meetings can do the same, or advertise
the inspection by putting up a notice in a conspicuous public place in the area of
the authority for at least 14 days.
All smaller authorities must also publish details of the dates they have set for
the inspection period. This must cover the ‘common inspection period’ which is
normally the first 10 working days of July.
Some authorities do not have an office and so usually arrange for inspection in
a local public place. You should not expect to go to anyone’s home to inspect
the accounts. The authority will arrange a suitable place for you to inspect the
accounts if it does not have an office.
26 Annex Local authority accounts: A guide to your rights
If an auditor receives a question or objection from a local elector in relation to a
smaller authority it will consider the matter in the same way as is set out in the main
part of this guide. The only difference will be that, given the size of the authority, the
relative costs of the action that may need to be taken by the auditor in response to
an objection as against the amounts of money involved is more likely to be a material
factor in determining the auditor’s decision as to whether or not to accept the
objection for consideration.
Please again bear in mind that the costs of any action taken are borne by local
taxpayers, and auditors have a duty to ensure that their response is proportionate
and that they remain mindful of the amounts of public money involved.
Exempt authorities
From 2017-18, the very smallest local authorities (those with annual gross income
and annual gross expenditure below £25,000) are potentially exempt from even
the annual limited assurance review required at other smaller authorities.
For the great majority of these authorities (there are a few exceptions – see below)
there will be no requirement even to have a limited assurance review or to submit
an annual return to the auditor, provided that the authority submits an exemption
certificate to the auditor. Authorities that submit an exemption certificate and are
otherwise eligible (see below) become ‘exempt authorities’. Authorities will have
to wait until the end of their financial year before they can determine whether or
not they are potentially exempt, when they will know their income and expenditure
totals for the year.
For exempt authorities, the ability of local electors and other interested persons
to exercise their public rights to inspect the accounts and supporting records, ask
questions, or make objections is the same as has already been set out in Part One
of this guide in respect of other authorities and in the main part of this guide. You
will still be able to contact the appointed auditor to bring matters to their attention,
ask formal questions or make objections. The name of the appointed auditor and
the auditor’s contact details should be included on the notice published by the
body when it commences the inspection period.
Note that just because an authority was an exempt authority in a previous year does
not mean that it will necessarily be exempt in relation to the current year of account.
Local authority accounts: A guide to your rights Annex 27
As noted above, there are certain circumstances in which an authority cannot
certify itself as exempt, even where it is below the £25,000 income and expenditure
threshold and has submitted an exemption certificate. These circumstances are:
• the year of account is one of the first three years of the authority’s existence;
and/or
• in relation to the year of account or the previous year of account the auditor
has taken formal legal steps in relation to the authority including issuing a
public interest report, seeking a declaration from the High Court, or making
a written recommendation under Schedule 7 of the 2014 Act (you can check
this with the auditor).
Where a smaller authority fails to submit an exemption certificate it must submit an
annual return to the auditor and will be required to undergo a limited assurance review.
Design and Production by NAO External Relations
DP Ref: 12022
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