The 2022/23 fee scale
After careful consideration of the issues raised in the feedback to our consultation and the anticipated scope of auditors’ work, PSAA has set the scale fee for 2022/23 on the basis of the following elements:
- the 2021/22 scale fees as a baseline; plus
- relevant adjustments for ongoing additional audit work from 2019/20 and 2020/21 approved fee variations, to be consolidated into the fee scale; and
- an adjustment of 5.2% for inflation in auditors’ remuneration required under the audit contracts, to be reflected in scale fees but funded for 2022/23 audits from the surplus available for distribution to opted-in bodies.
Additional requirements that are identified or quantified after publication of the fee scale or are not ongoing requirements will continue to be subject to the fee variations process.
Where we do not have approved fee variation information for individual bodies for prior year audits, we will need to consolidate those requirements into a future fee scale once the additional information is available. In these cases the local fee variations process will continue to apply in the interim.
We are not adjusting the 2022/23 fee scale for the additional work required for the VFM arrangements commentary or work on some updated technical standards. This is because we do not yet have sufficiently reliable information on the ongoing impact of these changes in requirements. The local fee variations process will continue to apply until we are able to consolidate the additional requirements into a fee scale or we are able to determine national fee variation levels. However, we have published indicative minimum additional fee ranges for 2020/21 audits to support discussions between opted-in bodies and auditors of the fees needed for this work, as follows:
Minimum additional fees: new VFM commentary work for 2020/21 and 2021/22 audits1
| District council | County council | London borough council | Met council | Unitary | Police (PCC + CC combined) | Fire | Other LG bodies |
| £6,000-£11,000 | £10,000-£19,000 | £10,000-£19,000 | £10,000-£19,000 | £10,000-£19,000 | £6,000-£11,000 | £5,000-£9,000 | Variable based on individual characteristics |
1 To be considered on an individual basis, but the general ranges may provide a useful reference
Minimum additional fees: ISA 540 work for 2020/21 and 2021/22 audits
| Overall minimum additional fees | ||||||||
| The additional fees below depend on body type and individual circumstances and the fee variation required may be higher than the suggested minimum | ||||||||
| Approximate minimum additional fee by body type: | ||||||||
| District council | County council | London borough council | Met council | Unitary | Police (PCC + CC combined) | Fire | Pension fund | Other LG bodies |
| £2,500 | £3,800 | £4,400 | £4,400 | £4,400 | £2,500 | £1,900 | £600 – £1,900 | Too variable to estimate |
The individual 2022/23 scale fees for opted-in bodies are available on the scale of fees page of our website.
Fee variations process
The nature of audit is such that it may be necessary for an auditor to carry out more audit work than has previously been required or planned. PSAA has the power to vary the audit fee payable by an opted-in body where it considers substantially more or less audit work was required than envisaged by the scale fee. Where it becomes clear that audit risk or complexity is significantly different from the level identified and reflected in the scale fee, or audit requirements have increased, the auditor may request a fee variation.
Variation requests must be made to PSAA by the auditor using a standard process. PSAA encourages discussions between the auditor and the body to take place as early as possible in the audit cycle, and ideally for the auditor to obtain agreement from the body to the proposed variation before seeking approval from PSAA. However, irrespective of whether the proposed variation has or has not been agreed by the body concerned, PSAA will scrutinise every proposal and is responsible for the ultimate determination of every variation. The variation is not due until PSAA has approved the request.
PSAA regularly obtains updated fee information in relation to proposed variations from the scale fee from appointed auditors and considers the reasonableness of the explanations provided by auditors. For example, PSAA considers fee variations in relation to Code changes, regulatory changes and inadequate working papers are potentially valid (subject to individual circumstances and the body’s observations).
Fees are chargeable when auditors carry out work in line with their other responsibilities, such as considering information provided by third parties, objections or carrying out other investigations.
Further information on the fee variations process is available on our website.
Statement of responsibilities
The statement of responsibilities of auditors and audited bodies sets out the expectations on which scale fees are based. The statement effectively represents the terms of engagement between appointed auditors and audited bodies and summarises their respective responsibilities.
Scale fees are based on the expectation that audited bodies can provide the auditor with complete and materially accurate financial statements and supporting working papers within agreed timeframes. Where a body is unable to fulfil these requirements, local fee variations may be required.
Additional audit costs that arise due to auditors not meeting expectations, for example where members of the audit team are inadequately prepared or where changes in audit teams lead to repeated questions, are ineligible for a fee variation.
Value added tax
Individual audit fees under the 2022/23 fee scale do not include value added tax (VAT), which will be charged at the prevailing rate, currently 20 per cent, on all work done.
Enquiries
If you have questions about this fee scale document, please send them to us by email to: workandfeesconsultation@psaa.co.uk.