Report of the Local Government Efficiency Review Group

isks which they have to manage. The annual report produced by the
committee should cover all aspects of their oversight role, including
overseeing the internal audit function, risk management and VFM initiatives.
It should also show the number of meetings attended by each member
during the year. The report must be presented to the full council for their
consideration. The 2006 Act provides for the issue of regulations by the
Minister on the working arrangements of local authority audit committees.
No regulations have issued to date.
7.3.4 The Group recommends that the annual internal audit plan should be
discussed with the local government auditor and presented to the audit
committee before finalisation. Any VFM studies or efficiency reviews carried
out within the local authority should be reported through internal audit. The
role of VFM officer within an authority could be assigned or extended to
cover internal audit. Regulations, as provided for in the 2006 Act, should
now be issued on the operation of audit committees. This should include
good practice as identified from experience to date.
7.4 External Audit and Value for Money
7.4.1 The external audit of local authorities is provided for in Sections 114 to 126
of the Local Government Act 2001. The statutory outputs of the audit
process are audit opinions and audit reports on the local authority annual
financial statements. Audit reports include the comments of the county/ city
manager in response to the matters raised as an integral part of public
accountability of local authority management. Reports are addressed to the
elected members of the local authority and are presented to the full council
for consideration. The issues raised in these reports are also reviewed by
the authority’s audit committee.
7.4.2 An annual activity report is published each year by the Director of Audit of
the LGAS and includes commentary on some of the more common issues
reported on by local government auditors. The Group considers that there
is scope for this report to include a greater focus on the issues arising in the
local government sector, based on the financial data contained in the
audited annual financial statements of the city and county councils.
7.4.3 There is a need for a stronger and more strategic overview of financial
management and audit across the Local Government Sector. The Group
recommends that the Director of Audit produce an annual report, building on
the existing activity report, taking a sectoral perspective. This overview
would take account of issues emerging from individual audits, through
interaction with audit committees and the work of internal audit processes
and arising from VFM studies. The report would provide the opportunity for
the Director to put before the Minister for the Environment, Heritage and
Local Government key issues for attention and for the sector to address.
7.4.4 The annual report should be sent to the Oireachtas committee on the
Environment, Heritage and Local Government which can be discussed with
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