Government approves Public Sector Audit Appointments (PSAA) to become new audit body

pectPublic Sector Audit Appointments Ltd (PSAA) has been specified by the Government to become the body which is authorised to make future audit appointments on behalf of principal local authorities. This will provide local public bodies with an efficient means of ensuring maintenance of high quality audit arrangements

The Department for Communities and Local Government has approved PSAA's bid to become the sector-led body for the independent appointment of auditors for principal authorities in England. The first appointments made under these arrangements will commence in relation to the financial year 2018/19.

The Local Government Association (LGA) successfully lobbied for the Local Audit & Accountability Act 2014 to include provision for the establishment of a sector-led body to procure future audit contracts.

Initially, it established PSAA as an independent company to be responsible for the time-limited function of managing audit contracts let by the Audit Commission prior to its closure in March 2015. However, from the outset PSAA has always been regarded as a prime candidate to take on the longer term sector-led body role.

Approaching 270 councils and other local bodies have already expressed an interest in joining the national scheme which PSAA will now develop and manage. PSAA has prepared an initial draft prospectus and is inviting views from bodies on the arrangements including the views on the optimal length of the initial term of the auditor appointments.

Steve Freer, PSAA Chairman, said:

"We are delighted to have been appointed to develop and run the national scheme. We are confident that it will represent an important, value for money option for all local bodies and that many will choose it as their preferred way forward. A high level of participation will enable us to attract the best audit suppliers and ensure competitive prices.

"High quality independent audit is one of the cornerstones of public accountability, giving assurance that taxpayers' money has been well managed and properly expended, and inspiring trust and confidence in the organisations and people responsible for managing public money. PSAA will be committed to delivering a high quality audit appointment and service in every participating body irrespective of size, scale, responsibilities or location."

LGA Chairman Lord Porter said:

"The LGA has worked hard to secure the option for local government to appoint auditors through a dedicated sector-led national procurement body.

"I would urge all local authorities to opt-in and take advantage of the financial benefits that this scheme will offer. This will deliver significant financial benefits to those who opt in. It will be far cheaper for councils than every council procuring their external auditor separately. It will avoid the need for hundreds of separate procurement exercises and will save time and costs which would otherwise be required to establish an Independent Auditor Panel."

Notes

  • Current contracts managed by PSAA are excellent value for money, being around 55 per cent lower than the cost to councils at their peak and representing a saving to the public purse of £200 million over a five year term.
  • External audit
  • Draft prospectus

22 July 2016

Contact

Greg Burns
020 7664 3184
greg.burns@local.gov.uk