September 2021 news bulletin

Welcome to the second PSAA e-bulletin.

This month alongside outlining details of the opt-in invitation which we issued to all eligible bodies on 22 September, we are publishing the results of our annual client survey based on the 2019/20 audits. We also highlight the outcome of our research to consider options for national fee determinations and our response to MHCLG’s local audit consultation, as well as promoting our forthcoming free webinars. Please note that we do not have a remit to provide guidance on audit matters and do not attempt to do so.

We hope that you find the information to be useful. If there are certain topics that you would like us to cover in these bulletins please email the team with your suggestions.

Your sincerely Tony Crawley, Chief Executive, PSAA

Content:

Formal invitation issued to principal local government including police and fire bodies to become opted-in authorities

In accordance being an appointed person under the Local Audit (Appointing Person) Regulations 2015, PSAA has formally invited all eligible bodies to opt in to the national scheme for local auditor appointments for the second appointing period. This will cover the audits of 2023/24 through to 2027/28.

If you are a S151Officer or Audit Committee Chair who has not received the formal opt-in invitation that was issued via email on 22 September, please contact us as a matter of urgency.

A decision to become an opted-in authority must be taken in accordance with Regulation 19, that is 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.

Client Survey

On 13 September PSAA published the results of our second survey to obtain audited bodies’ feedback on their 2019/20 audit engagements. The survey results provide feedback as to how auditors have managed their relationships with audited bodies. The effectiveness of relationship management is one of the measures that we use to monitor the quality of audit services provided. The PSAA Quality of Audit Services 2019/20 feedback survey is conducted independently for us by the LGA Research Team.

Outcome of PSAA research to consider options for national fee determinations

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

PSAA has subsequently undertaken research to assess the potential suitability for national determination of key changes in audit requirements from 2020/21 audits onwards. The research considered whether it is possible to estimate for all or most opted-in bodies a standard additional fee for each change where additional audit work is needed.

The research concluded that the impact of the specific changes in audit requirements considered in this exercise are variable depending on the local circumstances and arrangements of individual opted-in bodies.

We have therefore published 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.

Autumn/Winter webinar series

As announced in our previous e-bulletin, we will be running a series of free webinars aimed at S151 Officers and Audit Committee Chairs to provide the opportunity to find out more about aspects of our work.  Each webinar will contain essential information that eligible bodies need to understand.

Many have already registered. If you haven’t already done so, you can register to attend using the links below. Alternatively, if you wish to attend all events, please send details of your name, organisation, and email address to [email protected]. Joining instructions will be issued following registration.

Wednesday 20 October 1-2pm: Understanding new local audit system – what we know to-date and how it may develop over the next few years

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

Local audit news from elsewhere

PSAA has responded to the DLUHC’s (previously MHCLG) Local audit framework: technical consultation, which covered ‘proposals to implement the independent Redmond Review of local authority financial reporting and external audit.’ The consultation builds on the Department’s Spring Report Local authority financial reporting and external audit: Spring update. PSAA is committed to supporting the system-wide efforts to deliver a sustainable audit framework, and welcomes the Department’s continued determination to address the very significant challenges that local audit faces, and our response has the sole aim of helping to deliver that goal.

CIPFA is consulting on the 2022-23 Code of Practice on Local Authority Accounting: Code of Practice on Local Authority Accounting 2022/23 | CIPFA. Closing date 11 October 2021