ACCOUNTING FOR THE AUDIT COMMISSION

Abstract

THE Audit Commission for Local Authorities in England & Wales (the Commission) was established under the Local Government Finance Act 1982 (the Act) and took up its responsibilities in early 1983. The aim of external auditing of local government, under the direction of the Commission, is now not merely the continuation of traditional financial and regularity audits, but also to judge the “economy”, “efficiency”, and “effectiveness” of local authorities’ operational arrangements and accomplishments. In its first four years, the Commission claims to have identified f492 million of potential savings by local authorities, and forecasts further savings in excess of f150 million annually. The Commission was established, and functions, in a period of considerable controversy about the performance, roles, size, and funding of local government and the wider public service. Its aims, analyses, audit findings, recommendations and emphasis have been the focus of widescale attention and some controversy. To what extent has the establishment of the Commission and the new value for money (VFM) audits been a radical change from the past? Was, and is, there evidence that such extended audits are feasible? Were VFM audit techniques already established and proven in the private sector? What were the context and conditions of possibility which permitted and precipitated the Commission? What are the aims and characteristics of the Commission’s approach? What limitations and barriers does it confront? Does it aim only to evaluate or more fundamentally to change local authorities? What are its accomplishments? What is its future? External auditing of local activities wholly or partly funded by a local levy on the public has a long history. With the dissolution of the monasteries and the termination of their charitable role, poor relief (locally administered and financed by local taxation) emerged and with it checks that the proceeds of such taxation were properly expended.’