The local financial reporting and audit system in England is in crisis. The proportion of local authorities in England that have published their audited financial statements on time has fallen from more than 95% in 2017 to less than 12% in 2022. This has knock-on effects for the audits of other public bodies such as in the NHS.
High-profile governance failures have led to significant financial losses. Impenetrable financial statements are not well understood and are not being used effectively to hold local public bodies to account. There is insufficient capacity in the local audit market, while auditors, finance teams and regulators are not aligned in their view of audit risks. Under-resourced finance teams struggle to produce good quality working papers. Local authority finance teams and audit firms struggle to retain staff in the profession.
This crisis is recognised and well understood by central government, which launched a public inquiry into the issue in 2023. The inquiry reported in February 2024 with a series of 14 recommendations for the improvement of local financial reporting and audit. These recommendations are largely directed at the UK government itself and specifically at The Department for Levelling Up, Housing and Communities and consist of calls for inter alia new legislation to standardise reporting requirements and format, clearer guidelines for auditors and audit leads in local authorities as well as new forms of collaboration with relevant regulatory and professional bodies.
The proposed project seeks to explore how these recommendations are translated into specific public policy changes under the new Labour government and to focus on how local authorities themselves, as well as relevant regulatory and professional bodies, are preparing and adapting to these recommendations and policy changes. The aim of this exploration is to assess whether progress is being made in restoring the financial governance and accountability of local authorities and to identify key barriers and enablers to this progress. The project should be of interest to scholars of accounting and governance as well as to those concerned with public policy more broadly. The study would also afford the opportunity to contribute to ongoing discussions and consultations about new policy in this area.
How to apply:
- Details on how to apply can be found in here: https://www.findaphd.com/phds/project/responses-to-the-crisis-in-local-government-financial-reporting-and-audit-in-the-uk/?p181723
- Applicants should also complete the online LISS-DTP Diversity Monitoring Form
- The closing date for applications is 23 February 2025
- Interviews will be held on w/c 10th or 17th March
- This project is offered as full-time only
- For any queries contact crawford.spence@kcl.ac.uk