Conclusion on VFM arrangements
The Code of Audit Practice requires appointed auditors to issue a conclusion on whether an audited body has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources. This is known as the conclusion on arrangements to secure value for money (VFM).
Conclusion on arrangements to secure VFM based on specified reporting criteria
Appointed auditors of the following types of bodies are required to give their statutory conclusion on arrangements to secure value for money based on reporting criteria specified by the Commission:
- NHS trusts
- clinical commissioning groups
- single-tier, county and district councils
- fire and rescue authorities*
- police bodies
- the Greater London Authority bodies
*A separate conclusion is not required for county fire and rescue services, as they are covered by the auditor’s conclusion on arrangements to secure value for money for the county council.
Specified criteria for the auditor’s conclusion on arrangements to secure value for money
Auditors of the bodies listed above give their statutory conclusion on arrangements to secure VFM based on the following two reporting criteria, as specified by the Commission.
|Specified criteria for the auditors VFM conclusion on arrangements to secure VFM:|
|The organisation has proper arrangements in place for securing financial resilience.||The organisation has proper arrangements for challenging how it secures economy, efficiency and effectiveness.|
|Focus of the criteria:|
|The organisation has robust systems and processes to manage financial risks and opportunities effectively, and to secure a stable financial position that enables it to continue to operate for the foreseeable future.||The organisation is prioritising its resources within tighter budgets, for example by achieving cost reductions and by improving efficiency and productivity.|
Conclusion on arrangements to secure value for money for other bodies
A different approach applies to auditors’ local VFM audit work at the following types of audited bodies:
- Other local government bodies not included above (for example, national park authorities, waste disposal authorities, joint committees, integrated transport authorities and combined authorities)
Auditors meet their VFM duty at these bodies by:
- reviewing the annual governance statement / statement on internal control;
- reviewing the results of the work of other relevant regulatory bodies or inspectorates, to consider whether there is any impact on the auditors responsibilities at the audited body; and
- undertaking other local risk-based work as appropriate, or any work mandated by the Commission.
The Commission produces guidance to support auditors in meeting their statutory VFM responsibilities. The guidance is available from the following link: