Directors’ report
The directors present their report and the audited financial statements of the company for the year ended 31 March 2025.
Directors
For the year commencing 1 April 2024 the PSAA Board membership was as set out in the table below:
| Board members | Position | Date of appointment |
| Bill Butler | Chair | 1 April 2024 |
| Keith House | Non-executive director | 1 December 2017 |
| Marta Phillips | Non-executive director | 1 April 2021** |
| Fraser McKinlay | Non-executive director | 1 February 2022* |
| Mike O’Donnell | Non-executive director | 1 April 2022*** |
| Alan Edwards | Non-executive director | 1 February 2025 |
| Liz Murrall | Non-executive director | 1 February 2025 |
| Irene Asare | Non-executive director | 1 February 2025 |
** Marta Phillip’s appointment ended on 31 March 2025
*** Mike O’Donnell’s appointment ended on 30 September 2025
Board succession
The Chair is appointed by the IDeA, and other non-executive directors are appointed by the Chair following interviews with a panel consisting of officers and directors and external advisors and the approval of the IDeA. The composition of the Board is intended to bring together a range of skills and experience relevant to the governance of the company and its distinctive role.
More information on the PSAA Board and individual directors is available on the PSAA website.
Review of Board capacity
In November 2024 the company’s articles of association were revised to increase the maximum number of Board members from five to seven. This increase was designed to enhance the Board’s ability to better weather future challenges faced by the company across a wide range of significant and complex issues in areas not originally envisaged.
Register of interests
Board directors are required to notify and register any issues on which they might have a conflict of interest. Declarations of interest are also invited at the outset of each Board meeting. The register of directors’ interests is available on the PSAA website.
Statement of directors’ responsibilities
The directors are responsible for preparing the Strategic Report, Directors’ Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. The directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable United Kingdom Accounting Standards have been followed, including FRS 102, subject to any material departures disclosed in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors take seriously their duties under Section 172 of the Companies Act 2006 to promote the success of the company for the benefit of its members as a whole. The directors have satisfied themselves that consideration of its requirements, and the directors’ duties under it, have informed and guided their work throughout the year and have published on the PSAA website a Section 172 statement detailing how they have complied with this requirement.
Part 7A of Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 require disclosures concerning greenhouse gases, energy use or efficiency measures. PSAA is exempt from these disclosure requirements as the company does not qualify as a large company.
Directors’ indemnity provision
As permitted by the Articles of Association, the directors have the benefit of an indemnity which is a qualifying third-party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The company also purchased and maintained throughout the financial year directors’ and officers’ liability insurance in respect of itself and its directors.
Future developments
There are key developments on the horizon which will have a significant impact on the local audit landscape and some which will directly impact on PSAA:
- The Government’s publication of the results of their consultation into local audit reform sets out their proposals and longer-term plans to overhaul local audit. The establishment of a new single body, the LAO, to oversee local audit will simplify and streamline the currently fragmented system and is one of several steps towards resolving the sector’s most pressing challenges. The LAO will adopt PSAA’s full responsibilities to procure, appoint and contract manage local auditors. The indicative timeline for establishing the LAO is Autumn 2026.
Whilst these sector developments take shape and evolve, in the next year, PSAA will:
- Develop a flexible business plan to cover the period as we prepare to close down PSAA and transition to the LAO. We will regularly review our programme of activities to ensure we remain focused on the crucial issues and to ensure we provide the best possible service to our opted-in bodies.
- Set the 2025/26 annual fee strategy and consult on the fee scale for the second year under the new audit services contract by 30 November 2025.
- Consider the best option to secure the provision of local audits from 2028/29.
Going concern
In 2016 PSAA was specified by the Secretary of State for Communities and Local Government as an appointing person for relevant principal local government bodies under the provisions of the Local Audit and Accountability Act 2014. The Board has considered PSAA’s ability to continue as a going concern in accordance with the requirements of FRS 102. Although PSAA is expected to close as part of a planned transition to the Local Audit Office, the date of closure is not yet confirmed. The closure could occur either within or shortly after the 12-month period from the expected approval of the 2024/25 financial statements in November 2025.
PSAA has sufficient funding through to closure, and plans are in place to maintain delivery of statutory functions, manage contracts, and support the transfer of staff and responsibilities. Based on this, the Board is satisfied that there are no material uncertainties affecting PSAA’s ability to continue operating over the going concern assessment period. The financial statements have therefore been prepared on a going concern basis.
Subsequent events
There have been no other events affecting the company or the information provided in this annual report and accounts since the year end.
Disclosure of information to auditors
For each of the directors at the time this report was approved, the following applies:
- as far as the directors are aware, there is no relevant audit information of which the company’s auditor is unaware; and
- the directors have taken all steps they ought to have taken as directors to make themselves aware of any relevant audit information and to establish that the company’s auditor is aware of that information.
Independent auditors
A resolution to appoint Macintyre Hudson LLP as auditors for the company for three years 2022/23 to 2024/25 was approved by the Board on 24 October 2022 and extended by one year on 3 February 2025.
In April 2025 Macintyre Hudson LLP underwent a restructure and MHA Services LLP became the audit and advisory services arm of the organisation. We have novated the audit services contract to MHA Services LLP.
By order of the Board
Bill Butler
Chair
26 November 2025