We expect auditors to discuss proposed fee variations with bodies at the earliest opportunity. Wherever possible, the auditor should highlight at the planning stage any additional work that is likely to be needed during the audit, including potential fee implications (although it may not be possible to quantify this until the work is done). Our […]
Our fee variation process uses a defined set of categories for our review of fee variation proposals from auditors. This enables us to consider whether proposals relating to additional audit requirements, are proportionate and comparable. We use these categories in our fee variation statements to bodies. Auditors may, however, choose to use different terminology or […]
Where the statement does not include all fee variation proposals requested by your auditor, this may be because our review of some elements is not complete because we are waiting for further information. If we subsequently approve other fee variation proposals, we issue an updated statement.
The £49 million funding announced by MHCLG in April 2025 is being provided as part of the decision to overhaul the local audit system and clear the audit backlog. MHCLG has stated that this funding is to cover the costs associated specifically for bodies of clearing the backlog and rebuilding assurance, as part of the […]
In April 2025 MHCLG announced 16 new commitments to reform local audit, including simplifying financial reporting requirements and increasing capacity to avoid reliance on a small number of auditors. The reforms are backed by funding of £49 million to help eligible bodies clear their audit backlogs and cover the additional cost of rebuilding audit assurance. […]
The statutory Code of Audit Practice (COAP) issued by the National Audit Office sets out what local auditors of relevant local public bodies are required to do to fulfil their statutory responsibilities under the Local Audit and Accountability Act 2014. Local auditors must comply with the COAP. Para 2.6 requires auditors to apply the extant auditing […]
Fees for new recurring audit requirements are only consolidated into the scale fee once we have sufficiently reliable information on the level of ongoing audit work needed. The audit work for ISA (UK) 315 (risks of material misstatement) and linked work on ISA (UK) 240 (fraud) has been included in the 2024/25 scale fees, but […]
Work on VFM arrangements comprises two elements: The VFM arrangements commentary fee variation in the statement may be higher than determined for other audit years because it includes the scale fee element for core VFM work. For bodies where the auditor has only completed the VFM arrangements work and the work to issue a disclaimer […]
The proximity of the backstop dates for the up to 2022/23 and 2023/24 audits meant that we received fee variation proposals for over 700 audits in a short period. We are still working to process all fee variations and we are doing all we can to ensure we do so thoroughly, effectively and efficiently. The […]
We chose not to determine fee variations related to the issuing of a disclaimed opinion until MHCLG had confirmed the arrangements for allocating the £49 million additional funding announced in April 2025. MHCLG paid the first funding instalment in June 2026 and set out further information about the allocations in a technical note. Disclaimer fee […]