Ms Niamh Larkin:

I will take each of those points in sequence. I have raised the issue of the circulation of our audit reports. We work under a very tight deadline to have all our audits finished by 31 October each year. The audits for 31 December 2018 are now ongoing. They are all expected to be finished by 31 October. We work under a very tight schedule to achieve those deadlines and get those reports out. As the Senator notes, we have a mechanism whereby we send them to the chief executive and the head of finance of the local authority involved. Different local authorities follow very different plans after that. Some local authorities put the audit report on their own website the minute we send it to them, give us permission to post it on the Department's website and circulate it to the council in the next council pack. Other local authorities, as was said, wait until the report goes to the audit committee. Then there is a time delay because the audit committee has to prepare a report which must go back to the council. That is not satisfactory for us because then we are looking at accounts for December 2017 in December 2019. They are too far out of date. The issues have become dated for the councillors. Ideally, we would like to see it circulated.

There are two pieces of legislation that cover the issuance of our audit reports. Legislation requires us to send our audit report to the chief executive. There is also legislation under which the audit committee must consider our report. The problem is that the two pieces of legislation each stand alone. They do not outline a sequence which local authorities must follow. To resolve this issue, I have raised it with the County and City Management Association, CCMA, and the heads of finance. The Department is now looking to put together some guidance for local authorities on what should happen on receipt of our audit reports. Ideally, I would like for the report to be circulated within a very short time of us issuing it so that the issues can be actioned in a timely manner.

The second point the Senator raised concerned the management letters. When an issue is raised as part of the audit, it either ends up in the audit report or the management letter. We decide where it ends up based on the priority rating we assign it. We rate all our issues as high, medium or low priority. We also rank them. The most important issues end up in the audit report and the other issues end up in the management letter. The format of the management letter is such that we set out the issue, its implications and our recommendation on it. We rank that issue and then ask management for a response and a timeframe within which it will address the issue. We then follow up on that timeframe in the next audit. I know that a lot of the audit committees receive the management letter. From speaking to the audit committees, I know that they use our issues, put them into a template and track them as part of their audit committee meetings. Some audit committees now call in members of the senior management team to talk about issues in our audit report or management letter and see what progress has been made. We welcome that. That is another means of looking at the issue in order to resolve it.

Fixed assets are an area we would look at. As the Senator said, a lot of value is contained in assets. Some of the fixed assets consist of things like roads and parks, but our main concern is land and buildings. Those are the areas on which we concentrate. All the issues are listed on page 39 of our summary report. It is important to note that while some of the issues come up year after year, some progress is being made on them. This progress can be seen in audit reports as well and it is summarised on page 39. The problem is that many of these are legacy issues. As the Senator said, there is a legal issue. The local authority must find a legal title and map the site. Many local authorities are using things like geographic information systems, GIS, and technology to help make progress on that, but there is still a lot of work to be done in that area. We welcome any progress local authorities can make in that area.

The Senator's fourth point concerned companies. This comes up every year. There is a separate appendix at the back of the annual financial statement, AFS, appendix 8, in which the local authority has to list all the relevant companies. We audit that as part of the process. We ask for the audited accounts of those local authorities. We look at the audit report and any guarantees given by the council. We have raised all those issues and obviously we have several concerns about those companies. As the Senator said, there is sometimes a lack of governance or control where these companies are concerned. They may be operating at deficits in situations where the council has guaranteed their funding, or they may owe large amounts to councils. We have concerns, which we raise. Some of these are small companies that might be set up to run a swimming pool, for example. Some are very substantial companies that hold real estate. In those cases we do a lot more work on the figures behind the accounts. The auditors sometimes meet with the boards of those companies and look at board minutes to make sure that any concerns are reflected in our audit reports.

The Senator asked about our resources. We have 32 members of staff at the moment. We are currently running four or five vacancies. We find it difficult to attract staff because of the economic conditions in the major cities. We faced this problem last year and this year. We deal with it through the use of seconded staff from accountancy firms. However, that is not something we want to continue and we are working with the Department of Housing, Planning and Local Government and the Department of Public Expenditure and Reform to address those shortfalls. Our priority is audit, so our focus each year is on ensuring that all the audited financial statements are completed by 31 October. If we have extra days we use them to examine value for money. If we do not have enough staff we do not undertake as much value for money work as we would in years when we have a full complement of staff.

The Senator asked about accountability. I know the National Oversight and Audit Commission, NOAC, also spoke about having more oversight and accountability. There are mechanisms that work, such as the audit committees, which have been up and running for a few years. I refer particularly to their approach to tracking the issues in the last two or three years. We are very closely linked with the NOAC. We agree our programme of work on value for money in advance with NOAC and it informs us of the areas it is looking at. We undertook four reports last year on what we consider to be audit issues. We looked at unfunded balances, rates, loans and the cost of pensions to local authorities. We consulted with the NOAC on areas it wished to focus on and on audit issues we had seen coming up. We ask for input into our planning for work on value for money issues.

In regard to our relationship with the Comptroller and Auditor General, I note that we are part of a group called the Public Audit Forum, PAF. It is made up of audit bodies in the UK, Scotland, Wales and Northern Ireland as well as the Comptroller and Auditor General. We get together and share thinking on emerging trends such as data analytics. We look at best practice in our areas of work. On top of that, I meet periodically with one of the directors from the Office of the Comptroller and Auditor General to talk about things like training and work practices.