WIREDGOV

The Audit Commission has cut what it charges for checking government grants to councils by over a third during the past five years.

Fees for the work done by auditors in certifying grants have been reduced by £11.1 million. The Commission, in collaboration with grant-paying bodies, has also simplified and rationalised how grants claims are checked for errors, allowing it to cut the number needing to be scrutinised.

Since 2004 auditors have identified errors in grant claims worth £530 million - leading to reductions of £381 million in what councils were due, with increases of £149 million in what they should get.

Each year auditors check grants worth about £43 billion. They include housing benefit and council tax benefit subsidies from the Department for Work and Pensions and claims for regeneration schemes paid for by the European Regional Development Fund through the Department of Communities and Local Government.

As part of its commitment to lighten regulation while ensuring the fullest accountability for public money, the Commission has examined how certification is being carried out.

The report shows the Commission redeemed the promise it made when it last examined grant certification in 2004 - to ensure regularity while slimming costs. But its promised 25 per cent cut in fees over the five years has been comfortably exceeded.

Over that period auditors spotted errors worth more than five times what their work cost - that was £530 million against £117 million.

Steve Bundred, the Commission's chief executive, said: 'The review shows the Commission taking strides in cutting the cost and administration associated with certification.

'Since 2003 we have reduced fees by 36 per cent. We have been able to reduce the number of schemes needing to be certified by 70 per cent.

'We will go on talking to government departments and bodies paying grants about arrangements. Taxpayers must be assured that while certification arrangements are proportionate they are protecting the public purse.

'Our aim, in collaboration with local authorities, is to drive up standards in preparing claims and returns.'

The review recommends way the government, councils and auditors can streamline certification and enhance public confidence. The Commission will:

• publish an annual report summarising the work of its appointed auditors on claims and returns
• work with the National Audit Office and the Treasury on guidance for grant-paying bodies on when they should ask for auditors to certify claims
• require its appointed auditors to report annually on their certification work to local bodies’ audit committees, to highlight errors and adjustments, and what steps they can take to improve the preparation of claims and returns.

See link to report: www.audit-commission.gov.uk/claimsandreturns

Notes to editors

• The review looks at progress made since publication of a Commission report in 2004 which proposed new arrangements for auditing grants and promoting good practice by authorities and grant-paying bodies.
• It is based on research carried out from January-April 2009 involving data analysis and informed by discussions between auditors, grant-awarding bodies, and the Audit Commission. 
• The Commission is an independent watchdog, driving economy, efficiency and effectiveness in local public services to deliver better outcomes for everyone.
• Our work across local government, health, housing, community safety and fire and rescue services means that we have a unique perspective. We promote value for money for taxpayers, auditing the £200 billion spent by 11,000 local public bodies.
• As a force for improvement, we work in partnership to assess local public services and make practical recommendations for promoting a better quality of life for local people.

Further details about the role of the Commission can be obtained from: www.audit-commission.gov.uk

For further information please contact:
Jemima Broadbridge
Media Relations Manager, Audit Commission
Direct line: 0844 798 2264 or 020 7166 2264
24hr press line: 0844 798 2128 
E-mail: j-broadbridge@audit-commission.gov.uk