2019/20 fee scale
- The Regulations require PSAA to specify the scale of fees for the audit of the accounts of opted-in authorities before the start of the financial year to which the fees relate.
- The scale of fees for 2019/20 reflects the cost of the expected work programme based on the requirements of the Code of Audit Practice, and is based on the scale fees applicable for 2018/19. The 2018/19 scale fees represent the most accurate reflection available of the auditor’s assessment of audit risk and complexity to complete an audit compliant with the Code of Audit Practice for each opted-in audited body.
- The scale fee for each opted-in local government and police audited body is available on our website. Paragraphs 37 to 42 below explain the arrangements that apply to the variation of fees in certain circumstances.
- PSAA has the power to determine the audit fee payable. It may vary from the prescribed scale fee where substantially more or less audit work was required than envisaged by the scale fee. Scale fees are based on the expectation that audited bodies are able to provide the auditor with complete and materially accurate financial statements with supporting working papers, and within agreed timeframes.
- Where it becomes clear that audit risk or complexity is significantly different from the level identified and reflected in the 2018/19 scale fee, the auditor may request a variation to the scale fee. We would expect such requests to arise only where risk and/or complexity are significantly different from assumptions reflected in the 2018/19 scale fee.
- PSAA recognises that the 2018/19 scale fee did not allow for the additional work that auditors were required to carry out at the relatively small number of local government bodies that were designated as Public Interest Entities (PIEs), a new concept for the sector. It is anticipated that auditors will apply for fee variations requests in respect of PIEs for 2018/19. This second year is likely in most cases to identify the cost of recurrent elements of the additional audit requirements (such as long form audit reporting), and so will provide a basis for PSAA to discuss with the PIE bodies and their auditors whether the scale fee should be amended for 2019/20 to avoid repeated fee variations.
- Variation requests must be made to PSAA by the auditor using a standard process and cannot be invoiced to an audited body by the auditor until they have been approved by PSAA.
- PSAA obtains updated fee information, and explanations for any proposed variations from the scale fee, from appointed auditors on a regular basis. We consider the reasonableness of the explanations provided by auditors, and require the auditor to confirm that they have had an appropriate discussion about the reasons for the additional fee with the audited body before we finalise our decision on any variation to the scale fee.
- Fees are chargeable for considering objections from the point at which auditors accept an objection as valid, or any special investigations, such as those arising from disclosures under the Public Interest Disclosure Act 1998, as a variation to the scale fee.
Value added tax
- All the 2019/20 fee scales exclude value added tax (VAT), which will be charged at the prevailing rate of 20 per cent on all work done.