Public sector – New DLO report order

The Accounts Commission for Scotland has ordered a follow-up statutory report into the failure of management accounting systems in Scottish local authority direct-labour organisations and direct-service organisations that caused a raft of deficits.

Among six recommendations, the commission ordered councils to look into joint arrangements with neighbouring councils to create more efficient and effective DLOs. Its earlier report revealed that 50% of councils were likely to end the year with at least one DLO or DSO in deficit.

Commission chairman Professor Ian Percy said: ?Having considered the Controller of Audit?s report, I believe the way forward is for all councils to adopt the fundamental principles of good governance and focus their attention on the six key issues highlighted.?

The commission has written to all 32 Scottish local authority chief executives with a warning that they need to put in place ?proper management and governance arrangements to secure best value?.

l CIPFA Scottish branch has welcomed government proposals to review public audit in Scotland but warned the opportunity to improve accountability had been missed.

CIPFA said the proposals do not examine an extension of the public-audit framework, and would not maintain the two statutory audit agencies.

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