ICAS and the public sector

Group Discussing A Topic

A significant number of ICAS members work either for or with public sector organisations.

ICAS actively contributes to developments in policy and financial reporting in the public sector. Our Public Sector Panel consists of members from across the public services who volunteer their time to help shape ICAS' views. Our remit includes European, international, Scottish and UK issues.

To find out more about what we do and say on public sector issues, please go to icas.com and type 'public sector' into the search engine. You will find:

  • Articles
  • Consulation responses
  • Guidance
  • Research
  • Thought leadership

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Public Sector Panel Remit

To contribute to the development of public / not for profit sector policy and practice in the areas of financial reporting, auditing, accounting, financial control and other topical areas relating to the management, funding and delivery of public services.

This includes considering national and international policy and approaches, as well as their application whether within a particular jurisdiction and/or within relevant sectors, such as local government, central government, health, housing, further and higher education.

Policy positions

Our public sector policy positions are set out below, with overarching Technical Policy Board policy positions shown in brackets:

  • A proportionate approach to regulation, by and of public sector bodies, and alignment with overarching economic priorities to complement a private sector led recovery (better regulation)
  • Simplification and greater transparency of public sector reporting, including matters of public interest, to hold decision makers to account more effectively (transparency and accountability)

This is supported by:

  • Minimising over-specialism and sharing cross-sector good practice where appropriate
  • Alignment with one international accounting framework for both the profit and not for profit sectors unless there is a clear, justifiable need of a material public sector specific matter which is not covered by the IASB
  • A principles based approach to addressing public sector accounting differences in a proportionate and targeted manner (principles not rules)

Public sector accounting

Central government

Financial Reporting Manual

The Financial Reporting Manual (FReM) is the technical accounting guide for the preparation of financial statements.  It applies to entities consolidated within Whole of Government Accounts including central government bodies but excluding local authorities and the NHS.  Local authorities and NHS bodies have additional sector specific guidance (see below) which is compliant with the FReM.

The FReM applies EU adopted IFRS, as adapted or interpreted for the public sector context.  It is prepared following consultation with the Financial Reporting Advisory Board (FRAB) and is issued by the relevant authorities in England and Wales, Scotland and Northern Ireland.

The aim is to ensure that government financial reporting meets the best possible standards of financial reporting by following Generally Accepted Accounting Practice (GAAP) as far as possible.  The Board includes representatives from the accountancy profession in the private and public sectors, academia and government bodies.


NHS Boards

NHS Scotland publish the annual NHS Boards Accounts Manual for unified boards. This includes

  1. NHS Board annual report and accounts of NHS Boards and for Scottish Financial Returns (2014-15)
  2. NHSScotland Capital Accounting Manual (2014-15)

They are prepared by the Technical Accounting Group (Annual Accounts sub-group) and is issued by the Scottish Government Health Finance Directorate.

NHS Foundation Trusts

In England, Monitor issues the NHS foundation trusts: annual reporting manual which provides guidance for NHS foundation trusts on producing their annual reports and accounts.

NHS Trusts

In England the Department of Health issues the DoH Group Manual for Accounts on an annual basis.

NHS Organisations in Wales

The requirements for preparing and reporting the annual accounts and financial statements of individual organisations are provided by the Welsh Government. It includes the latest Manual for Accounts and Accounts templates and Technical Accounting Update letters issued by the DHSS Finance Directorate.

Northern Ireland

The Department of Health, Social Services and Public Safety in Northern Ireland provides local guidance based on the FReM for Health and Social Services Trusts in Northern Ireland


­The SORP Board is the body recognised by the Financial Reporting Council as the preparer and issuer of the Further and Higher Education SORP. Further details on the Board, development and consultation of the SORP are available are on the FEHE website.

The latest Statement of Recommended Practice - Accounting for Further and Higher Education 2015 is freely available on their website.  ICAS's response to the consultation on this SORP is published on our web site under public sector consultations.


The latest Housing Statement of Recommended Practice (SORP) is published by the National Housing Federation and available to purchase.

Further information on how it is developed and the consultation process is available:

ICAS has a housing sector working group which includes CAs working in that sector as Finance Directors and housing association audit partners.  The group is co-chaired by Janet Hamblin (Baker Tilly) and Joan Williamson (Findlay & Co). Members include Andrew Clark (Fife Housing Association), Iain Lee (Scott-Moncrieff), and Paula Oliver (East Lothian Housing Association).

Our response to the 2014 SORP consultation is published on our web site under public sector consultations.

If you are interested in attending the Annual Housing Associations Conference – see our ICAS events page.

Local authorities

Local authorities apply International Financial Reporting Standards (IFRS), (EU adopted) as interpreted and adapted by the Code of Practice on Local Authority Accounting in the UK, known as "the Code".  The Code is recognised as proper accounting practice.  Local authorities have a duty to observe proper accounting practice, as stated in primary legislation, including:

  • Local Government Act 2003 (section 21) – in England & Wales;
  • Local Government in Scotland Act 2003 (section 12);
  • The Local Government (Accounts and Audit) Regulations (Northern Ireland) 2015.

The Code is prepared by the CIPFA LASAAC joint board.  The CIPFA LASAAC website provides further details such as board minutes, who is on the board and terms of reference.

Copies of the Code are available for sale on the CIPFA website.


The Local Authority (Scotland) Accounts Advisory Committee (LASAAC) develops and promotes proper accounting practice for local government in Scotland.

LASAAC is funded by three organisations who each provide representatives.  Funders include:

  • Chartered Institute of Public Finance and Accountancy (CIPFA)
  • Scottish Government
  • Audit Scotland.

ICAS funded LASAAC until 2017.

Further details including terms of reference, membership, minutes and annual report of activities are available on the LASAAC webpages.


Public sector technical guidance for auditors is published by the organisations responsible for scrutinising public expenditure.

Audit Scotland provides detailed Technical guidance and support for each sector.  This is to support external auditors appointed by the Accounts Commission and Auditor General.

The NAO provides guidance documents and good practice to assist on the audit of financial statements.

Any updates to this page?

Please email accountingandauditing@icas.com


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