The government is considering allowing smaller public sector bodies to avoid full audits.
The Treasury is consulting on proposed changes to the financial regulatory framework for the island’s local government bodies.
It says the new approach would be ‘more proportionate’.
There are more than 50 local government bodies, including local authorities and combination bodies, ranging in size from annual gross expenditure of less than £5,000 to more than £30 million.
Under the Audit Act 2006 (and subsequent regulations) each of these bodies, regardless of size, is required to undergo a full statutory audit, with a total current cost to the sector of over £210,000.
The Treasury says that there is a high level of financial compliance now being achieved across the sector.
It believes that the existing ‘one size fits all’ approach is no longer appropriate and so is proposing a revised and more proportionate framework to audit/inspection, based upon turnover.
Any body with a turnover of £1m or more would still have a full statutory audit as they do now.
Any body with a turnover between £100,000 and £1m would have an assurance review by a regulated auditor.
This would be performed by an accountant who look at areas of concern.
Those with turnovers of under £100,000 would have a qualified independent examination.
This would be more like the sort of audit a charity has now and is less in depth.
A similarly proportionate approach based upon the same turnover thresholds is also being proposed for the approach to, and format of the annual accounts required to be published by each body.
Treasury Minister Eddie Teare MHK said: ‘The Treasury is pleased to now be in a position to make these proposals and anticipate that, if progressed, they should significantly reduce the overall regulatory burden whilst still maintaining a high standard of financial reporting across the sector.’
More information is on the government website, gov.im