PSAA welcomes the PAC’s continued engagement with the issue of local auditor reporting in local government, leading to today’s very important report highlighting the precarious state of the sector’s audit system. The report acknowledges that PSAA has previously described the problems facing local audit as ‘serious and pervasive’, and we agree that those problems persist, evidenced most graphically by the extent of delayed audit opinions.
Timely audit opinions are a critical part of the accountability framework for public money. In March the NAO set out a helpful analysis of the various causes of the increasing numbers of delayed opinions. The report covered the important impacts and consequences for a variety of different users of accounts of local bodies, including the additional fees that result from the increased audit work that is now needed to deliver the required standard. The cost of fee variations is continuing to rise as auditors strive to meet increased regulatory requirements as well as coping with the challenges of undertaking their work during the Covid-19 pandemic.
Tony Crawley, PSAA’s Chief Executive, said:
“PSAA is determined to play its part in helping to address the challenges that the PAC report highlights. We have recently consulted on our draft Prospectus for the next audit services procurement for 2023/24 onwards, and have also carried out a market engagement with audit firms. Encouragingly, both exercises have achieved a high level of engagement. We are currently working through all of the very informative responses, and will publish summaries of both in the near future.
However, our next procurement can only be a part of the solution – there are many other factors which will influence the speed with which a more stable and resilient system can be secured. We are particularly keen to engage with the new Liaison Committee, working with the other stakeholders with the aim of helping to build a more sustainable system, with timely delivery that meets the relevant quality requirements. We recognise that this will take time to achieve and that it will require all of the stakeholders to work together effectively through a challenging period.”