The closure of the Audit Commission on 31 March 2015 heralded the start of the process of devolving the responsibility for making external audit appointments to all local public bodies including all classes of local authorities, police (Chief Constables and Police and Crime Commissioners), fire and rescue bodies (where separate), waste disposal, transport authorities and executives, together with relevant NHS bodies.
Public Sector Audit Appointments Limited (PSAA), an independent company established by the LGA, manages the existing appointments under the transitional arrangements which, for local government sector bodies, are now due to end at the conclusion of the 2017/18 audits. Further details are available on the PSAA webpage.
Extension of transitional arrangements
The transitional arrangements have been extended to include 2017/18 audits for all bodies, excluding NHS and smaller bodies such as Parish Councils for whom current contracts will expire when the 2016/17 audits are complete.
The LGA argued for this extension in order to lock in savings of approximately £24 million per annum for local government bodies.
What happens when the current arrangements come to an end?
The choice for councils was:
- Establish an independent auditor panel (Part 3, section 9 and schedule 4 of the Local Audit and Accountability Act 2014).The panel must be made up of a majority, or of wholly independent members and must be chaired by an independent members.
- Establish a joint auditor panel to carry out the function on behalf of two or more bodies.
- Opt in to the national scheme for the appointment of auditors run by Public Sector Audit Appointments Limited (PSAA) as the approved sector led body specified by the Secretary of State to act as the Appointing Person on behalf of opted-in authorities. The LGA lobbied for the inclusion of this option within the legislation in order to secure economies of scale and savings in terms of the administrative burden on councils and other local government sector bodies
The overwhelming majority of eligible bodies (over 98%) have chosen to opt in to the national scheme.
New appointments for auditors need to be made by December 2017 regardless of which option is chosen.