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Audit Wales wraps up 2020 with a trio of reports

4 January 2021: Audit Wales has issued reports on the 2019-20 Welsh government accounts, extra funding provided to NHS Wales, and progress against equality objectives.

Audit Wales has published three reports in the last month of 2020 covering the Welsh Government accounts, extra money being spent on NHS Wales, and how Audit Wales is progressing against its equality objectives.

Commentary on Welsh Government Consolidated Accounts 2019-20

In addition to the statutory audit report included with the Welsh Government’s annual financial statements, Audit Wales has published a report commenting on the financial statements and how they were compiled, seeking to highlight aspects of the accounts and to bring the numbers to life for a wider audience.

These accounts consolidate the results of the Welsh Government with the entities that it controls including 11 health bodies that make up NHS Wales (seven local health boards, three NHS Trusts and a special health authority), the Development Bank for Wales, Transport for Wales, the Regeneration Investment Fund for Wales, the Welsh career service, and Cardiff International Airport.

Total expenses for the Wales consolidated financial statements for 2019-20 amounted to £17.5bn, an increase on the previous year of 7%. Total assets amounted to £30.4bn and total liabilities to £3.7bn. 

The commentary provides additional information on the qualified audit report issued by the Auditor General for Wales on the 2019-20 Welsh Government accounts, which stated that there was a material omission of £739m in expenditure relating to grants provided to businesses in March 2020 in response to the COVID-19 pandemic. The Welsh government disagrees with the Auditor General’s view on the accounting treatment that should be applied and hence with the qualification, arguing that this expenditure is correctly recorded in the 2020-21 financial statements instead. The inclusion of this expenditure would have shown the Welsh Government exceeding its authorised net expenditure limit approved by the Senedd for 2019-20, making this expenditure ‘irregular’.

Key matters noted include the significant funding received from the EU and how the Welsh Government will continue to draw down on EU funds until 2024. The majority of expenditure is in the form of grants, including to local government, while assets on the balance sheet mainly consist of property, plant and equipment, with the largest elements being the strategic road and rail networks together with land and buildings. Student loan assets amounted to £3.5bn having been written down from £5.3bn, while there was a capital investment of £115.9m in Cardiff City Airport.

Audit Wales also comments on the opportunities for improvement in respect of the implementation of the Well-being of Future Generations (Wales) Act 2015, the identification of fraud, staff resourcing to implement government policies, and governance over grant payments.

NHS Finances Data Tool

Audit Wales has produced an interactive tool to show how additional funds provided to NHS Boards to address the pandemic have been used. The tool also shows how much has been spent on field hospitals, protective equipment and the test and trace project. 

NHS bodies reported spending £501m on COVID-19 related activities by the end of September 2020, the halfway point in the financial year.

Audit Wales Equality Report 2019-20

This statutory report has been prepared by Audit Wales in accordance with the Equality Act 2020 and details how Audit Wales has sought to meet its equality objectives.

Audit Wales assesses its performance as effective on eight of nine of its objectives, with one of these being highly effective (providing information in an accessible way). However, it reports that it was ineffective in its approach to addressing structural gender pay differences and structural pay differences in relation to other protected characteristics. A new workforce strategy has been adopted that seeks to meet this objective.


Alison Ring, director for public sector at ICAEW, commented: “The impact of the pandemic on the financial statements of Wales Government for the year ended 31 March 2020 was relatively small compared to the much greater sums expended since 1 April, but it is still concerning to see a qualified audit report on how expenditure should be recorded. The commentary from Audit Wales is helpful in providing more insight into this audit issue and the wider contents of the accounts, including – for example – the potential risk of an impairment in the carrying value of Cardiff airport.

“It is good to note the progress made by Audit Wales against its equality objectives and that action is being taken to make further improvements through an expanded five-year Workforce Strategy approved by the Board in September 2020.”