April 2023 update

This edition of our quarterly e-bulletin includes last month’s Public Accounts Committee evidence session on audit timeliness, our Business Plan, our Audit Quality Monitoring Report for 2022, and a summary of local audit news from elsewhere, including an important opportunity for you to have a say on how the Whole of Government Accounts process could be more efficient for you.

In January the NAO published a progress update report on the timeliness of local auditor reporting in England, which the Public Accounts Committee considered at an evidence session in March. We have also highlighted several other consultations and reports issued that refer to local audit timeliness.

We hope that you continue to find our e-bulletin to be useful. We welcome your thoughts on future topics that you would like us to cover (contact the team).

Yours sincerely

Tony Crawley, Chief Executive, PSAA


Public Accounts Committee evidence session on timeliness

A Public Accounts Committee (PAC) evidence session on the ‘Timeliness of local auditor reporting’ took place on 16 March 2023.

Evidence was provided by Jeremy Pocklington CB (Former Permanent Secretary of DLUHC), Sarah Healey (Permanent Secretary at DLUHC), Catherine Frances (Director General Local Government and Resilience and Communities at DLUHC), Neil Harris (Director for Local Audit at the FRC) and Tony Crawley of PSAA.

The transcript of the meeting can be accessed on the PAC’s website.

Annual Client Survey for 2021/22 audits

Last month we invited S151 Officers and Audit Committee Chairs from all opted-in bodies to share their views on their most recent audit. This annual survey is an important part of our Quality Monitoring and Reporting Framework. As in past years we commissioned the LGA’s Research team to design and administer the survey on our behalf to ensure independence and transparency.

The survey closed on 31 March, and the results are being independently analysed and we will publish them on our website once available. We would like to thank everyone who took the time to share their views.

Update on audit positions at 31 March 2023

The issues which first emerged during audits of the 2018/19 accounts have continued to be a significant and escalating problem in subsequent years.

The result is that more than 500 opinions are delayed as of 31 March 2023. The quarterly contract monitoring reports published on our website provide summarised information about audit opinions, objections and fee variations.

Annual Audit Quality Monitoring Report for 2020/21 audits

We published our Annual Quality Monitoring Report for 2022 in March.

This report covers the work of local auditors appointed by PSAA for the 2020/21 financial year. It is the third consecutive report during challenging times for all local audit stakeholders. We bring together the information from our client survey, the results of professional regulation and contractual compliance into a single document.

You can find details of past Annual Quality Monitoring Reports on our website.

Summary of our latest Business Plan

We have published our Business Plan up to 31 March 2025. It sets out who we are, what we do, and how we will deliver the role of the Appointing Person through our work programme over the next two years.

Local Audit is facing significant challenges and there are many uncertainties about the future. We have extensive contact with both auditors and opted-in bodies, which means we can identify emerging issues and alert other stakeholders. Our plan sets out the active role we will take in supporting efforts to address the challenges and help the drive towards a more stable, more resilient, and more sustainable system.

Recognising the future uncertainties, we will keep our plan of activity under review and where necessary respond to emerging issues and developments within the local audit system.

PSAA’s Advisory Panel meeting

Our Advisory Panel of Treasurers’ Societies members met on 20 February 2023.

Andrew Kendrick, Audit Manager at the NAO, attended this meeting as a key speaker. He provided an overview of the NAO’s progress update report on timeliness of local auditor reporting in England, issued in January 2023. This was a follow up to the report published in March 2021 which highlighted the underlying local audit position. The update report would provide an opportunity for the PAC to consider whether it wished to conduct further enquiries into the local audit. An evidence session was subsequently held on 16 March 2023 (as included above).

The meeting also covered an update on developments in the sector including the infrastructure assets issue, our annual client survey for 2022, a look ahead at the 2023/24 scale fee, audit delivery information, and a summary of local audit news.

The next meeting of the Panel is scheduled for 12 June 2023. Our guest speaker will be Iain Murray, Director of Public Financial Management at CIPFA.

Local audit news from elsewhere

Many of you will have shared your data submission for the consolidation of Whole of Government Accounts (WGA), based on your own financial statements. As you will be aware, the WGA publication timelines have extended since the pandemic for several reasons.

HM Treasury is working to shorten the WGA timetable over the next few reporting cycles and achieve earlier publication dates. Matt Rowe, Head of WGA at HMT, and his team are working with PwC to review the full WGA process, starting with data submissions from local and central government bodies and through to audit and publication.

One objective is to make the process more efficient for those involved, and this consultation is a great opportunity for local government to share sector-specific opinions, challenges, and suggestions that can shape the future of the WGA process.

PwC are hosting a workshop on Wednesday, 26 April, at 2:30pm in their Birmingham and London offices, as well as virtually. If you or colleagues in your finance teams would like to attend, and share your perspectives and suggestions on the WGA data collection process, please sign up using this link: https://forms.gle/NbiDQPssyJnnox2o6 or contact alexander.d.worth@pwc.com and carina.walker@pwc.com.

On 30 March CIPFA published its year-end bulletin – CIPFA Bulletin 14: Closure of the 2022/23 Financial Statements.

The outcome of the DLUHC consultation issued in February regarding the deadline for category 1 authorities to make draft accounts available for public inspection, was to revert to the original requirement in the 2015 regulations, reinstating the requirement for a common inspection period to include the first 10 working days of June. In effect, this means publication of draft accounts no later than 31 May 2023.

The HM Treasury launched its consultation on the thematic review of non-investment asset valuations on 8 March. This closes on 18 May 2023.

The Levelling Up, Housing and Communities Committee launched an inquiry into financial reporting and audit in local authorities on 3 March. The closing date for evidence submissions was 17 April.

On 2 March DLUHC and the FRC published their agreed Memorandum of Understanding. This outlines the responsibilities of the FRC as shadow system leader for local audit.

CIPFA issued its Code of practice on local authority accounting in the United Kingdom: Guidance notes for 2022/23 accounts in February. The guidance notes offer support in dealing practically with the preparation of the year-end financial statements and reports that accompany them.

In March Grant Thornton published its report – About time? Exploring the reasons for delayed publication of audited local authority accounts.

Public Money & Management (PMM) Volume 43, Issue 3 (2023) focussed on local public audit and accountability, including an article by Steve Freer, PSAA’s Chair – Local audit: buying in a sellers’ market.

Localis published an essay collection on the future of local government finance reform on 2 March – Moving through the gears: where will local government finance be in 2030? It includes contributions from the NAO, CIPFA, the LGA and the District Councils’ Network.

On 8 February the NAO published a guide detailing the components of a good annual report – Good practice in annual reporting.