a. Why do local councils need audits?

A local council has a range of statutory powers including the authority to raise money through the precept (taxation).  This is public money and there are rules and procedures set out in legislation by government to protect the local council and any community assets to ensure there are no unacceptable risks.  

In practice this means that Councils must have an adequate and effective financial management framework and sound systems for internal control. 

Governance and Accountability for Smaller Authorities in England sets out "proper practices" and the local council must comply with these which includes a requirement to make suitable arrangements for the proper administration of its financial affairs.

In ensuring internal control systems are adequate, local councils must conduct an annual review and approve an annual governance statement in relation to their accounts.  To achieve this there is a dual system of independent annual audit - internal and external audit.