Shining a light on the Welsh Government’s 2019-20 accounts
The Auditor General’s new commentary draws out key information for the public and those responsible for scrutiny.
The commentary provides a summary of how the Welsh Government is funded, how it spends its money, what it owns and what it owes. They also explain the Auditor General’s qualification of his audit opinion on the Consolidated Accounts 2019-20.
In 2019-20, Welsh Government ‘group’ spending increased by £1.2 billion (7%) compared with 2018-19. Total expenditure in 2019-20 amounted to £17.5 billion. The Welsh Government ‘group’, which comprises 17 different entities, had assets of £30.4 billion at 31 March 2020 and was carrying some £3.7 billion of liabilities and obligations. The commentary provides further details.
The Auditor General issued a qualified opinion on the 2019-20 accounts. This was due to a material omission of expenditure relating to certain grants business would receive in response to the COVID-19 pandemic, this has arisen due to a disagreement with the Welsh Government on a complex technical accounting issue. The omission of that expenditure means that in his opinion the accounts do not give a ‘true and fair’ picture of the Welsh Government’s financial position in 2019-20. The inclusion of the expenditure would have shown that the Welsh Government had exceeded its authorised net expenditure limit approved by the Senedd for 2019-20, thereby making some expenditure irregular. The Welsh Government disagrees with the Auditor General’s view on the accounting treatment applied and hence with the qualification.
The Consolidated Accounts do not just describe the Welsh Government’s finances; they also provide information about how the Welsh Government is run. Relevant to this, the commentary provides a summary of issues from the Auditor General’s wider work programme in areas including implementation of the Well-being of Future Generations (Wales) Act 2015, workforce planning, grants management, counter-fraud arrangements and ICT.
Contained within the annual accounts of the Welsh Government is a wealth of important information. I have prepared this new commentary to draw some of that to the surface so as to inform the public and those responsible for scrutiny of the Welsh Government, drawing out key information about Welsh Government finances and findings from our wider work on aspects of Welsh Government governance and administration.
While I have qualified my audit opinion, this is due to the accounting treatment applied by the Welsh Government to certain business grants and does not reflect a view on the overall value for money of that expenditure.
Regardless of the qualification of my audit opinion, against the backdrop of the uncertainty and wider pressures arising from the pandemic, it is a tribute to all those involved that the work to prepare and audit the accounts has been completed in line with the timetable that we agreed with the Welsh Government in April 2020.
Notes to Editors:
- Our Annual Plan 2020-21 described how we would seek to engage a wider range of audiences with the outcomes of our annual audits of public bodies’ accounts, and this commentary on the Welsh Government’s Consolidated Accounts 2019-20 demonstrates this.
- The Consolidated Accounts cover the ‘core’ Welsh Government and another 16 entities that together make up the Welsh Government ‘group’ (Exhibit 1 in the commentary).
- Since autumn 2014, the Senedd’s Public Accounts Committee has reported on matters arising from the Welsh Government’s accounts on an annual basis and published the most recent report [opens in new window] in May 2020 on the 2018-19 Consolidated Accounts.
- The Auditor General is the independent statutory external auditor of the devolved Welsh public sector. He is responsible for the annual audit of the majority of the public money spent in Wales, including the £20 billion of funds that are voted on annually by the Welsh Parliament. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £8 billion) and to local government (over £4 billion).
- The audit independence of the Auditor General is of paramount importance. He is appointed by the Queen, and his audit work is not subject to direction or control by the Welsh Parliament or government.
- The Wales Audit Office (WAO) is a corporate body consisting of a nine member statutory Board which employs staff and provides other resources to the Auditor General, who is also the Board’s Chief Executive and Accounting Officer. The Board monitors and advises the Auditor General, regarding the exercise of his functions.
- Audit Wales is the umbrella name for the Auditor General for Wales and the Wales Audit Office. Audit Wales is a registered trademark, but it is not a legal entity in itself.