October 2021 news bulletin

Welcome to the third PSAA e-bulletin.

In the last month it has been confirmed that only 9% of local government 2020/2021 audit opinions were issued by the target publishing date of 30 September 2021. This is a very disappointing position and you can read more about it below.

The current challenges provided the backdrop to the launch of our Autumn Winter Webinar series on 20 October with our first one  ‘Understanding the new local audit system’, where we shared our take on how it may evolve following the Redmond Review.

Also in this edition we’ve highlighted the outcome of our research on the factors and minimum additional fee ranges associated with specific changes in requirements for 2020/21 audits – designed to be helpful for all parties as you start to discuss fee variation proposals with your auditor.

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

Your sincerely Tony Crawley, Chief Executive, PSAA

Content:

 

News of 2020/2021 Audited Accounts

This month, we issued the news on the 2020/2021 completed audited accounts. Delayed audit opinions continue to be a major concern in the local audit system.  The growing scale of the challenge is illustrated by the latest figures with only 9% of local government bodies having had audits completed by the target publishing date, compared to 45% for 2019/2020 audits and 57% for 2018/2019 audits.

We are very much aware of the challenges posed by Covid-19 and how they may have contributed to this current position, and conscious of how these delays can have a real public-facing impact, potentially undermining the ability of local bodies to account effectively for their stewardship of public money to taxpayers.

PSAA is a member of the newly formed Local Audit Liaison Committee (established by DLUHC as outlined in its Spring statement). We are working to help identify and develop further initiatives to strengthen local audit through the committee, which comprises a range of local audit stakeholders including DLUHC, FRC, NAO, ICAEW, CIPFA and the LGA. We have highlighted the need for a range of actions to tackle the identified issues that are essential to support a more stable, more resilient, and more sustainable local audit system, and all stakeholders agreed to emphasise the importance of improving audit timeliness.  The minutes of the 29 July 2021 Committee are publicly available  Local Audit Liaison Committee – GOV.UK (www.gov.uk)

Outcome of PSAA research to consider options for national fee determinations

In response to feedback from opted-in bodies and auditors, in November 2020 we consulted on a possible new approach for determining some fee variations. We sought views on the desirability of reducing the volume of local audit fee variations and to explore if PSAA could determine some fees for additional work on a national basis, across all or most audits. The response to the consultation was positive.

We then carried out research on the potential to determine standard fees to deal with key changes in audit requirements from 2020/21 audits onwards.  We have published the results of the research additional information for 2020/21 audit fees on the factors and minimum additional fee ranges associated with specific changes in requirements for 2020/21 audits with the aim that this will help when bodies and auditors are discussing the audit outcomes.

Formal invitation issued to become opted-in authorities

On 22 September PSAA formally invited all eligible bodies to opt-in to the national scheme for local auditor appointments for the audits of 2023/24 through to 2027/28.

If you are a S151Officer or Audit Committee Chair and have not received the formal opt-in invitation that was issued via email on 22 September, please email us as soon as possible via [email protected]

It is really important to note that the decision to become an opted-in authority must be taken by the members of an authority meeting as a whole (i.e. Full Council or equivalent), except where the authority is a corporation sole, such as a police and crime commissioner, in which case this decision can be taken by the holder of that office. The LGA has produced a specimen report that can be easily adapted to support the decision making process to opt in.

The closing date to notify PSAA of your authority’s acceptance of the invitation is Friday 11 March 2022. You can find out the latest information on our preparations for the second appointing period on our website and FAQs.

Autumn/Winter webinar series

We held the first webinar in our Autumn Winter series on ‘Understanding the new local audit system’ on 20 October. PSAA’s Chair Steve Freer hosted it with short presentations followed by a Q&A session. We were pleased to welcome over 40 representatives from local government. The webinar slides are available to view on our website. We have further webinars planned in 2021 and early 2022:

Wednesday 24 November 1-2pm: Understanding and managing auditor/auditee changes during the lifecycle of an appointing period

Wednesday 19 January 1-2pm: Understanding how we determine your audit fees and what might influence them over the next contract period

Wednesday 16 February 1-2pm: Understanding the 2022 audit services procurement strategy

Wednesday 16 March 1-2pm: Understanding our contract management arrangements

These webinars are mainly aimed at S151 Officers and Audit Committee Chairs, and are an opportunity to find out more about  what we do and current events. You can register to attend by clicking on the individual webinar titles above, or if you wish to attend all events please send details of your name, organisation, and email address to [email protected]. We will issue joining instructions when we have registered you.

Local audit news from elsewhere

Changes to the Appointing Person Regulations were laid before Parliament on 21 October, making details of the proposed changes available to the House of Commons and the House of Lords.

These changes will provide us (as the appointing person) greater flexibility for example we have until 30 November 2022 to set the scale fees for the 2022/23 audit year, rather than setting them by 31 March 2022. We welcome this change as we will be able to build in approved recurring fee variations to the scale fee, making them more accurate and also reducing the volume of fee variations.

If you are interested to find out more about the changes to the regulations or are interested to view the paper, the UK Parliament website advises that papers can be viewed at the Journal Office in the Palace as soon as they are laid, while copies should also be available in the Vote Office, they also will appear in the Votes and Proceedings and appear in the House of Lords Business Paper.

Have your say! – CIPFA’s Research Project on Internal Audit

Are you interested to share your views on internal audit? This month, CIPFA is undertaking research on internal audit in the public services, and is keen to hear views from client organisations and audit committee members on internal audit.

The survey titled ‘CIPFA Research on internal audit in the public services’ is open until the end of October.

CIPFA will be running focus groups in November with internal audit clients and audit committee members to explore issues arising from the survey.  If you are interested in attending one of those sessions, you can express interest when responding.  For more direct information you can contact [email protected].