The local audit crisis has again forced the National Audit Office’s (NAO) head, Gareth Davies, to disclaim the Whole of Government Accounts (WGA) for the 2023-24 financial year.

The issue of a disclaimed audit opinion means that the Comptroller and Auditor General was unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion, meaning that there was “inadequate assurance over material balances” through the WGA.

This follows the 2022-23 financial year, where WGA received a disclaimed audit opinion for the first time due to delays in the completion of local authority audits across England.

The WGA is a vital tool in the management and scrutiny of public spending as it brings together all public sector assets and liabilities, income and expenditure.

As well as local authority accounts, the WGA combines the accounts of more than 10,000 public bodies, including central government departments, devolved administrations, the NHS, academy schools and public corporations.

Missing data

In total 186 local government organisations failed to submit data to be consolidated in the WGA, of which 167 were in English local government. This is a slight improvement on the previous year, where 187 English local government organisations did not submit any data.

Additionally, of the 407 English local authorities that should have submitted audited information into the WGA, 55% (224) submitted data based on unaudited accounts. Only 4% (16) of English local authorities were able to submit adequate audited data for 2023-24, compared with 10% (40) who achieved this in 2022-23.

Ongoing reporting issues and audit delays were cited by the WGA report as the main reason for non-submission. The WGA deadlines for submitting draft Cycle 1 unaudited data (16 August 2024) and Cycle 2 audited data (13 September 2024), came before the statutory deadline for English local authorities to publish audited accounts for 2023-24 of 28 February 2025.

Disclaimed opinion for several years

In future financial years, the report highlights that WGA expects the volume of missing data to reduce, due to the implementation of a series of backstop dates by which each year’s local government audits must be completed, and the creation of the Local Audit Office, which is designed to reform the local audit system.

However, there is a recognition that this may take “a number of years to flow through”, with the expectation that while local authorities will be able to submit data in future years, much of this will remain unaudited until the local audit crisis is resolved.

This is likely to result in WGA receiving a disclaimed opinion for several years.

The NAO’s Gareth Davies says: “It is essential that the government’s reforms to the local government audit system in England are effective in restoring timely and robust assurance in that sector so that the accuracy of the UK’s WGA can be properly assured. 

“Even more importantly, local taxpayers in England deserve timely audited accounts from their local council.”

Improved timeliness in reporting

One positive for WGA is the achievement of returning to its pre-COVID timetable of publication prior to the summer recess the year after the balance sheet date. This contrasts to the 2022-23 financial year, which was published in November 2024.

HM Treasury (HMT) is aiming to continue this trend with publication of the 2024-25 WGA financial statements scheduled for June 2026, recognising the importance of high-quality, timely reporting for enabling users to hold government to account effectively.

Alison Ring, Director, Public Sector and Taxation, ICAEW, says: “It is a huge step in the right direction for WGA to be able to return to a pre-recess timetable. More timely publication drives improvements in corporate governance, enabling WGA to be used across government as a tool for strategic decision-making.

“However, it is disappointing – but not surprising – that the WGA was disclaimed for the second year running. The various reforms being implemented by the government across the local audit system will hopefully provide the catalyst for removing the disclaimer in future years and will enable HMT to focus on making further improvements to an already useful document.”