Report of the Local Government Efficiency Review Group

7.5.3 Notes and appendices to the accounts provide additional information,
including revenue income collection performance on the main sources, and
note 17 in the annual financial statement shows the difference between the
adopted budget and the actual outturn for the year by service division. Very
few local authorities produce full monthly or even quarterly accounts,
although management reports are used for budget monitoring purposes.
This makes the task of producing the annual financial statement more time
consuming.
7.5.4 The Group is of the view that there is a need for an improvement in the
management reporting in local authorities. Local authority elected members
should receive quarterly reports on the financial performance of the council
against the approved budget.
7.5.5 The Local Government Management Agency (formerly the Local
Government Management Services Board) collates and publishes a report
on service indicators for local authorities (see section 3.5). This report is
addressed to the Minister and is made available to the public through the
LGMA website.
7.5.6 The Group recommends that financial performance indicators, as shown in
Appendix 7, should be verified as part of the annual audit. Performance in
relation to these should be assessed and commented on in the audit report
and published in the annual financial statement, as appropriate. These
relate to financial information contained in the accounts and should be
collated on a national level by the LGMA and reported on as part of its
publication of the service indicators. Other locally-determined performance
indicators should be published in the annual report of the local authority as
agreed with stakeholders.
7.6 Risk Management in Local Authorities
7.6.1 Local authorities are engaging with the process of risk management as a
key element of corporate governance. A risk management policy should be
in place for all city and county councils. Individual departments and
sections within local authorities should be responsible for drawing up their
own risk registers. Training should be provided to staff concerned to assist
in embedding a risk management culture throughout the authority. The risk
manager/ unit should report on the most significant corporate risks to the
audit committee on a regular basis.
7.6.2 Credit control management procedures vary widely across local authorities
and even within a local authority for the different income sources. Some
income sources such as commercial rates may have well-established credit
control procedures, while others may depend on resources available in
various finance units throughout the council. Generally, where an
established credit control process is put in place, collection performance
improves. This may be within the relevant department or in a centralised
credit control function.
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