Terms of Appointment

Public Sector Audit Appointments Limited (PSAA) is responsible for appointing auditors, setting audit fees, overseeing the delivery of consistent, high quality and effective audit services to local public bodies, and ensuring effective management of the contracts with the audit firms.

Under Schedule 1 of the Local Audit and Accountability Act 2014 (the Act), all contracts for audit and related services, let by the Audit Commission, were transferred to PSAA on 1 April 2015. PSAA is responsible for managing and monitoring compliance with the contract requirements and reporting publicly on the results.

The Terms of Appointment for auditors (the Terms) are issued by PSAA under powers delegated by the Secretary of State for Communities and Local Government. The Terms set out additional requirements that auditors must comply with, over and above those set out in the Code of Audit Practice (the Code) issued by the National Audit Office (NAO) and in legislation, and covers matters of practice and procedure which are of a recurring nature. Each year, we will assess auditors’ compliance with these statutory terms of appointment. The key aspects of compliance that will be monitored are:

  • the delivery of audit outputs against target dates;
  • consideration and, if appropriate, approval of auditors’ requests for variations to the scale audit fee where they have had to carry out more (or less) work; and
  • consideration of, and where we are satisfied that the work does not create a threat to the auditor’s independence, approval of auditors’ proposals to provide non-audit services to audited bodies.

The Terms are not year-specific and will be updated regularly as changes are required. They become effective when issued.

Revised Terms of Appointment for the audit of principal local government and police bodies were issued on 23 February 2017.

Terms of Appointment (updated 23 February 2017)

The Terms of Appointment for the audit of NHS Trusts, CCGs and smaller authorities are as issued on 30 September 2015. They remain in place for the audit or limited assurance reviews at these bodies until the 2016/17 work has been certified as closed.

Terms of Appointment (NHS and smaller bodies)

Appendix 1 of the Terms of Appointment is the Memorandum of Understanding between PSAA and the NAO. The signed version of the MoU is available here:

Appendix 1 MoU between PSAA and NAO