This edition of our quarterly e-bulletin covers news from MHCLG including its response to the submissions to its reform consultation, a reminder about the payment of audit fees, and a summary of local audit news from elsewhere.
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).
Content:
- MHCLG news including its consultation response
- Payment of audit fees
- Audit opinion data following the February backstop
- Client survey for 2023/24 audits
- Contract Monitoring Data Pack: Quarter 4 for 2024/25
- Latest Audit Quality Monitoring Report
- PSAA’s Advisory Panel meeting
- Local audit news from elsewhere
MHCLG news including its consultation response
MHCLG published its response to the consultation on its local audit reform strategy in England on 9 April. There are 16 new commitments from MHCLG, including simplifying financial reporting requirements and increasing capacity to avoid reliance on a small number of auditors.
MHCLG also announced up to £49 million of support to help bodies clear their backlogs and cover the additional cost of restoring audit assurance. Funding is reliant on compliance with statutory backstops and linked to the publication of audited accounts and audit fees being paid.
Minister McMahon made a Written Ministerial Statement in Parliament on 4 March regarding the publication of the non-compliance lists for audits up to 2022/23. The Statement describes what has happened following the 13 December backstop and commits to update on the outcomes of the 2023/24 backstop.
In February the local audit system leadership responsibilities transferred from the FRC back to MHCLG, as part of the government’s strategy to overhaul the local audit system.
Payment of audit fees
We would like to remind opted-in bodies that audit fees, including payments for additional fees (fee variations), are statutory and must be paid once determined by PSAA.
Being up to date with the payment of audit fees is one of the qualifying conditions for the recently announced government funding to support authorities who received a disclaimed audit opinion due to the backlog solution. Some firms are experiencing delays in receiving purchase orders, which is preventing them from billing for the audit fees which they collect on behalf of PSAA. We ask that all bodies ensure they issue purchase orders and pay audit fee invoices promptly.
Audit opinion data following the February backstop
We issued a press release on the local government audit opinion position as at 28 February backstop date for the 2023/24 audits. By 30 April there were 422 audit opinions delivered for 2023/24, including 185 unmodified opinions (7 with additional disclosures), 230 disclaimed or qualified opinions due to the backstop, and 7 disclaimed or qualified opinions not related to the backstop. 37 opinions remain outstanding.
We publish data on audit opinion delivery on a monthly basis, covering opinion delivery for the audits from 2018/19 onwards.
Client survey for 2023/24 audits
Our client survey seeks your views on your audit experience. This feedback is important as it informs our discussions with the audit firms and other local audit stakeholders. The LGA’s Research and Information Team manage the delivery of the survey to provide independence and transparency.
For the 2023/24 audits we issued the survey shortly after you received your audit opinion. If you received your opinion by 31 March, you should have been sent your invitation from the LGA to take part in the survey. If you have not received it please contact us.
We are keen to hear views from all bodies, and so we issued a short survey to bodies that had not received an audit opinion by 31 March.
You can visit our website for further details or please email our team with any queries.
Contract Monitoring Data Pack: Quarter 4 for 2024/25
We have published our Contract Monitoring Data Pack: Quarter 4 for 2024/25. The data pack covers audit opinions, approved fee variations and electors’ objections up to 31 March 2025.
Contract monitoring data packs for previous quarters are available to view.
Latest Audit Quality Monitoring Report
Our latest published report covers audits from 2018/19 to 13 December 2024, the backstop date for the audits for the years up to 2022/23.
The report is shorter than in previous years as there is less new information to report on due to the impact of the audit backlog, including the regulators’ suspension of routine inspections and our decision not to run an annual client survey last year due to the backlog.
PSAA’s Advisory Panel meeting
Our Advisory Panel of Treasurers’ Societies members met on 27 February and focused on developments at CIPFA around local audit, devolution, local government reorganisation and funding reform. Iain Murray, Director of Public Financial Management at CIPFA, was the key speaker. The Panel is due to meet again on 5 June and will feature the latest on local audit reform, with MHCLG providing an update.
Local audit news from elsewhere
On 14 May the FRC published its study into the audit market for NHS providers and Integrated Care Boards. This report supports the government’s reform of the wider local audit system.
On 19 March a Public Accounts Committee report was issued on the Whole of Government Accounts 2022/23 with recommendations to the government. The NAO was unable to sign these off for the first time in 14 years due to the level of unaudited data used in the accounts and the level of data that was missing, and there was much focus on the local government aspect.
Grant Thornton published a report with the Institute for Government on 4 March – Navigating the future: The dual challenge of local Government reorganisation and devolution, which explores the complexities of this process and provides recommendations for a successful transition.
CIPFA issued its new Advisory Note Five: Statement of Responsibilities on 13 February. The advisory notes offer guidance for local government Chief Finance Officers to declare their annual accounts are true and fair.
On 11 February the NAO published their Good practice in annual reporting guide on transparent, timely, and clear annual reporting for the public sector.
CIPFA published its Service Reporting Code of Practice for Local Authorities 2025/26 that supports UK local authorities with preparing their budgets, performance indicators, and government statistical reporting, effective from 1 April 2025. The report is aligned with the financial reporting framework established by the Code of Practice on Local Authority Accounting in the United Kingdom.