LOCAL AUTHORITY ACCOUNTS: A SUMMARY OF YOUR RIGHTS Please note that this summary applies to all relevant smaller authorities, including local councils, internal drainage boards and ‘other’ smaller authorities. The basic position The   Local   Audit   and   Accountability   Act   2014    (the   Act)   governs   the   work   of   auditors   appointed   to   smaller   authorities.   This   summary   explains   the   provisions   contained   in Sections   26   and   27   of   the   Act.   The   Act   and   the   Accounts   and   Audit   Regulations   2015    also   cover   the   duties,   responsibilities   and   rights   of   smaller   authorities,   other organisations and the public concerning the accounts being audited. As   a   local   elector,   or   an   interested   person,   you   have   certain   legal   rights   in   respect   of   the   accounting   records   of   smaller   authorities.   As   an   interested   person   you   can inspect   accounting   records   and   related   documents.   If   you   are   a   local   government   elector   for   the   area   to   which   the   accounts   relate   you   can   also   ask   questions   about   the accounts   and   object   to   them.   You   do   not   have   to   pay   directly   for   exercising   your   rights.   However,   any   resulting   costs   incurred   by   the   smaller   authority   form   part   of   its running costs. Therefore, indirectly, local residents pay for the cost of you exercising your rights through their council tax. The right to inspect the accounting records Any   interested   person   can   inspect   the   accounting   records,   which   includes   but   is   not   limited   to   local   electors.   You   can   inspect   the   accounting   records   for   the   financial   year to   which   the   audit   relates   and   all   books,   deeds,   contracts,   bills,   vouchers,   receipts   and   other   documents   relating   to   those   records.   You   can   copy   all,   or   part,   of   these records   or   documents.   Your   inspection   must   be   about   the   accounts,   or   relate   to   an   item   in   the   accounts.   You   cannot,   for   example,   inspect   or   copy   documents   unrelated to   the   accounts,   or   that   include   personal   information   (Section   26   (6)   –   (10)   of   the   Act   explains   what   is   meant   by   personal   information).   You   cannot   inspect   information which   is   protected   by   commercial   confidentiality.   This   is   information   which   would   prejudice   commercial   confidentiality   if   it   was   released   to   the   public   and   there   is   not,   set against this, a very strong reason in the public interest why it should nevertheless be disclosed. When   smaller   authorities   have   finished   preparing   accounts   for   the   financial   year   and   approved   them,   they   must   publish   them   (including   on   a   website).   There   must   be   a 30   working   day   period,   called   the   ‘period   for   the   exercise   of   public   rights’,   during   which   you   can   exercise   your   statutory   right   to   inspect   the   accounting   records.   Smaller authorities   must   tell   the   public,   including   advertising   this   on   their   website,   that   the   accounting   records   and   related   documents   are   available   to   inspect.   By   arrangement you   will   then   have   30   working   days   to   inspect   and   make   copies   of   the   accounting   records.   You   may   have   to   pay   a   copying   charge.   The   30   working   day   period   must include   a   common   period   of   inspection   during   which   all   smaller   authorities’   accounting   records   are   available   to   inspect.   This   will   be   2-13   July   2018   for   2017/18   accounts. The   advertisement   must   set   out   the   dates   of   the   period   for   the   exercise   of   public   rights,   how   you   can   communicate   to   the   smaller   authority   that   you   wish   to   inspect   the accounting records and related documents, the name and address of the auditor, and the relevant legislation that governs the inspection of accounts and objections. The right to ask the auditor questions about the accounting records You   should   first   ask   your   smaller   authority    about   the   accounting   records,   since   they   hold   all   the   details.   If   you   are   a   local   elector,   your   right   to   ask   questions   of   the external   auditor   is   enshrined   in   law.   However,   while   the   auditor   will   answer   your   questions   where   possible,   they   are   not   always   obliged   to   do   so.   For   example,   the question   might   be   better   answered   by   another   organisation,   require   investigation   beyond   the   auditor’s   remit,   or   involve   disproportionate   cost   (which   is   borne   by   the   local taxpayer).   Give   your   smaller   authority   the   opportunity   first   to   explain   anything   in   the   accounting   records   that   you   are   unsure   about.   If   you   are   not   satisfied   with   their explanation, you can question the external auditor about the accounting records. The   law   limits   the   time   available   for   you   formally   to   ask   questions.   This   must   be   done   in   the   period   for   the   exercise   of   pubic   rights,   so   let   the   external   auditor   know   your concern   as   soon   as   possible.   The   advertisement   or   notice   that   tells   you   the   accounting   records   are   available   to   inspect   will   also   give   the   period   for   the   exercise   of   public rights   during   which   you   may   ask   the   auditor   questions,   which   here   means   formally   asking   questions   under   the   Act.   You   can   ask   someone   to   represent   you   when   asking the external auditor questions. Before   you   ask   the   external   auditor   any   questions,   inspect   the   accounting   records   fully,   so   you   know   what   they   contain.   Please   remember   that   you   cannot   formally   ask questions,   under   the   Act,   after   the   end   of   the   period   for   the   exercise   of   public   rights.   You   may   ask   your   smaller   authority   other   questions   about   their   accounts   for   any year, at any time. But these are not questions under the Act. You   can   ask   the   external   auditor   questions   about   an   item   in   the   accounting   records   for   the   financial   year   being   audited.   However,   your   right   to   ask   the   external   auditor questions   is   limited.   The   external   auditor   can   only   answer   ‘what’   questions,   not   ‘why’   questions.   The   external   auditor   cannot   answer   questions   about   policies,   finances, procedures   or   anything   else   unless   it   is   directly   relevant   to   an   item   in   the   accounting   records.   Remember   that   your   questions   must   always   be   about   facts,   not   opinions. To avoid misunderstanding, we recommend that you always put your questions in writing. The right to make objections at audit You   have   inspected   the   accounting   records   and   asked   your   questions   of   the   smaller   authority.   Now   you   may   wish   to   object   to   the   accounts   on   the   basis   that   an   item   in them   is   in   your   view   unlawful   or   there   are   matters   of   wider   concern   arising   from   the   smaller   authority’s   finances.   A   local   government   elector   can   ask   the   external   auditor to   apply   to   the   High   Court   for   a   declaration   that   an   item   of   account   is   unlawful,   or   to   issue   a   report   on   matters   which   are   in   the   public   interest.   You   must   tell   the   external auditor   which   specific   item   in   the   accounts   you   object   to   and   why   you   think   the   item   is   unlawful,   or   why   you   think   that   a   public   interest   report   should   be   made   about   it.   You must   provide   the   external   auditor   with   the   evidence   you   have   to   support   your   objection.   Disagreeing   with   income   or   spending   does   not   make   it   unlawful.   To   object   to   the accounts   you   must   write   to   the   external   auditor   stating   you   want   to   make   an   objection,   including   the   information   and   evidence   below   and   you   must   send   a   copy   to   the smaller authority. The notice must include: confirmation that you are an elector in the smaller authority’s area; why you are objecting to the accounts and the facts on which you rely; details of any item in the accounts that you think is unlawful; and details of any matter about which you think the external auditor should make a public interest report. Other   than   it   must   be   in   writing,   there   is   no   set   format   for   objecting.   You   can   only   ask   the   external   auditor   to   act   within   the   powers   available   under   the   Local   Audit   and Accountability Act 2014 . A final word You   may   not   use   this   ‘right   to   object’   to   make   a   personal   complaint   or   claim   against   your   smaller   authority.      You   should   take   such   complaints   to   your   local   Citizens’ Advice   Bureau,   local   Law   Centre   or   to   your   solicitor.   Smaller   authorities,   and   so   local   taxpayers,   meet   the   costs   of   dealing   with   questions   and   objections.      In   deciding whether   to   take   your   objection   forward,   one   of   a   series   of   factors   the   auditor   must   take   into   account   is   the   cost   that   will   be   involved,   they   will   only   continue   with   the objection   if   it   is   in   the   public   interest   to   do   so.   They   may   also   decide   not   to   consider   an   objection   if   they   think   that   it   is   frivolous   or   vexatious,   or   if   it   repeats   an   objection already   considered.   If   you   appeal   to   the   courts   against   an   auditor’s   decision   not   to   apply   to   the   courts   for   a   declaration   that   an   item   of   account   is   unlawful,   you   will   have   to pay for the action yourself.
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