PSAA will consult on and confirm auditor appointments to opted-in bodies from 2018/19 between August and December 2017, following award of contracts to audit firms in June. Appointments will be confirmed by the statutory deadline of 31 December 2017.
The process for making individual auditor appointments for opted-in bodies from 2018/19 is set out below.
For each firm awarded an audit contract with PSAA, we will put together a balanced portfolio of proposed appointments during July 2017. Firms will need to confirm the position on independence issues for each opted-in body, before we can consult audited bodies on proposed appointments.
Within the overall context of developing auditor appointments that represent value for money, we will have regard to the following six principles approved by the PSAA Board:
- ensuring auditor independence;
- meeting our contractual commitments;
- accommodating joint/shared working arrangements where possible;
- ensuring a blend of authority types for each audit firm;
- taking account of a firm’s principal locations; and
- providing continuity of audit firm, if possible.
The primary consideration in allocating proposed appointments to individual opted-in bodies will be ensuring independence, and then balancing the remaining principles. PSAA’s stakeholder advisory panel has confirmed its support for these principles.
Consulting audited bodies
We will begin the process of consulting audited bodies on proposed appointments in August 2017, allowing five weeks for the consultation (14 August to 22 September).
Where a body accepts the appointment we have proposed, no further action is needed. The PSAA Board will consider all the 2018/19 appointments for approval at its meeting in December 2017, and confirmation letters will then be sent to opted-in bodies.
We recognise that in some instances there could be valid reasons why the proposed firm may not be appointed. Opted-in bodies will therefore have the opportunity to make representations on the proposed appointment. Although the timetable is very tight for this appointments exercise, we have provided for two opportunities for bodies to make representations (16-27 October, and 10-24 November).
Where an audited body objects to their proposed auditor appointment, it should set out in writing the reasons why the appointment should not be made.
The following may represent acceptable reasons:
- there is an independence issue, of which PSAA had not been informed;
- there are formal and relevant joint working arrangements, of which we had not been informed; or
- there is another valid reason, for example a body can demonstrate a history of inadequate service from a particular firm.
Representations will be considered carefully and a formal response made in each case, whether accepted or rejected. Bodies whose representations are not accepted will have one final opportunity to make representations to the Board, providing any additional information they may wish to present to support their case.
Consulting on revised proposals
Where the PSAA Board confirms that we should consult on a revised appointment proposal in response to a representation, we will send a further consultation to the audited body. There will be a two-week consultation on the revised appointment proposals (16-27 October).
This consultation period will also apply for any opted-in body whose representations have not been accepted and which wishes to present additional information to enable further consideration of the grounds for their representation. If the Board decides that we should consult on any revised appointment proposals in response, a further two-week consultation period will apply (10-24 November).
Finalising and confirming appointments
The PSAA Board will approve all proposed appointments from 2018/19, following consultation with audited bodies, at its meeting in mid-December. The Board’s decision on the appointment of auditors is final. Following Board consideration, we will write to each audited body to confirm their appointment. We plan to send all confirmations on 18 December.