councillors need to understand their councils financial statements says LASAAC

08-08-2011

Never has it been more important to have access to consistent and high quality information about the financial position of local authorities.  The financial statements produced by local authorities contain a wealth of information about the stewardship of public resources and local authorities’ financial health.  They can however be complex for councillors and members of the public to understand.  This is the warning from The Local Authority (Scotland) Accounts Advisory Committee (LASAAC).

An example is the adoption of International Financial Reporting Standards (IFRS) in local government.  Scottish local authorities are now expected to account using international financial standards.  The aim is to improve the comparability of local authority accounts with the rest of the public sector and, in due course the private sector.  This change will however be challenging for the readers of the financial statements, particularly for non-accountants.

As a first step to overcoming these challenges, and to making the most of the information now available, LASAAC has produced a guide to Scottish local government financial statements.  The guide is designed to be used:

  • as a reference document by councillors and interested parties; and
  • by a variety of individuals and organisations as a supplement to, and support for, the training and professional development of councillors.

Chair of LASAAC, Lynn Bradley said:

‘We are conscious that much of the financial information produced is complex and that there is a risk they are regarded as irrelevant by councillors and citizens.  For that reason, we have produced this reference guide to help them to scrutinise and understand their local authority’s financial statements.’

While the guide is based on the Scottish environment, much of the content will be relevant UK wide.  LASAAC undertook a consultation process on the composition and substance of the guide.  Responses indicated a high level of support for the objectives and content of the document.

Ends

Contact: Lindsay Machin
CIPFA Press Office
t 020 7543 5645
e lindsay.machin@cipfa.org.uk

Notes to Editors:

1. Holding To Account is available on the CIPFA website. It is available as an on-line reference (with quick links to specific sections) or as a pdf download. The document is intended to help readers of Scottish local government financial statements make the most of the opportunities and minimise the challenges.  The document is primarily aimed at those charged with governance, particularly elected members.  It will also be of use to other readers of the financial statements.

2. The Local Authority (Scotland) Accounts Advisory Committee (LASAAC) is constituted of volunteer members representing CIPFA, ACCA, ICAS, Audit Scotland and the Scottish Government. LASAAC is primarily concerned with the development and promotion of proper accounting practices for Scottish local authorities. A key task in achieving this is LASAAC’s contribution to the development of the ‘Code of Practice on Local Authority Accounting in the United Kingdom’ (‘the Code’).

3. About CIPFA

CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. They include the benchmark professional qualification for public sector accountants as well as a postgraduate diploma for people already working in leadership positions. They are taught by our in-house CIPFA Education and Training Centre as well as other places of learning around the world. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services. This includes the development of local professional qualifications in African countries like Lesotho and Nigeria and in Europe in post conflict states in the Balkans.