Frequently Asked Questions

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  1. Are you planning to set global fee variations that will be applied to all contracts when there is a change from the Regulator on what audit coverage is required?

    In November 2020, PSAA consulted on changes to fee variations arrangements. This was to introduce a new approach where changes in audit requirements relate to the conduct of all or most audits and where a standard cost can reasonably be estimated across groupings of bodies.

    On the basis of the positive response to the consultation, PSAA resolved to implement the proposed changes as set out in its response to the consultation.

    If auditors are required to do significantly less work because of regulatory change, then the scale fee would be reduced accordingly. Regulation 17(2) of the Local Audit (Appointing Person) Regulations 2015 enables us to vary fees up or down, where significantly more or less work is needed to complete a Code compliant audit.

  2. Auditors used to employ valuers. Has PSAA considered allowing councils to pay more for specific requirements (valuers) within the contract?

    We recognise that as part of the drive to improve audit quality the FRC is encouraging use of experts such as valuers, and audit firms can claim additional fees for appropriate use via the additional fees process.

  3. Can an opted-in body opt out at a later date?

    No, acceptance of PSAA’s invitation to opt in means that the body is opted in for the duration of the compulsory appointing period (typically set at five years, so from either 2018/19 or 2023/24).

    The only exception is where the body ceases to exist or the body ceases to fall within the classes of authorities for which PSAA is the appointing person.

  4. Can eligible local government or police bodies still opt into the scheme for an appointing period if it did not accept the invitation to join the scheme, or if it is unsuccessful in establishing local arrangements?

    An eligible body that did not accept the opt-in invitation for an appointing period may request to opt in during the appointing period only:

    • for the audits 2023/24 to 2027/28, that is on or after 1 April 2023

    PSAA must consider a request as the appointing person in accordance with the Regulations. It must agree to the request unless it has reasonable grounds for refusing it and notify the eligible body within four weeks of its decision with an explanation if the request is refused.

    Where the request is accepted, the body will become an opted-in body for the remainder of the appointing period on the date the notice is received by PSAA.

    PSAA may recover from the opted-in body its reasonable costs for making arrangements to appoint a local auditor in these circumstances.

  5. Do audited bodies act as evaluators for the procurements or is it just PSAA staff?

    For both the 2017 and 2022 procurements, the quality evaluation of tender responses was independently observed by the LGA having put in place assurance to guarantee commercial confidentiality in the process.

  6. Does PSAA require its contracted audit firms to demonstrate how they will minimise environmental impact/address climate change issues?

    PSAA’s audit services contracts covering the audits from 2018/19 to 2022/23 include a clause in relation to ‘Co-operation with PSAA on environmental issues’. This states that “Throughout the Contract the Supplier shall co-operate with PSAA in seeking reasonable and practical ways to improve the sustainability of the delivery of the Services”. There is a requirement for our contracted firms to consider environmental issues.

    Our contracts covering the audits from 2023/24 to 2027/28 require auditors to co-operate with us in seeking reasonable and practical ways to improve the sustainability of the delivery of the Services.

  7. Does the appointing person scheme cover the audit of an authority’s pension fund where it is the administrative body responsible for preparing the pension fund accounts?

    Pension funds are not separate legal entities from their administering local authority for audit, and are therefore not listed as relevant authorities in schedule 2 of the Local Audit and Accountability Act 2014.

    The auditor appointment to an opted-in local authority includes the audit of the pension fund where the authority is the administering body. The pension fund audit is subject to a separate engagement and scale audit fee, but the auditor appointment covers both the local authority and the pension fund.

  8. Does the appointing person take on all Auditor Panel roles and therefore mitigate the need for there to be one in each individual authority?

    Opting into the appointing person scheme removes the need for a body to set up an independent Auditor Panel. The detailed requirements for this are set out in the Local Audit and Accountability Act 2014 and the Local Audit (Appointing Person) Regulations 2015.

  9. How are audit fee levels set for each individual body?

    PSAA follows the requirements of the Local Audit (Appointing Person) Regulations 2015.

    PSAA consults annually on the fee scale. Individual scale fees are published on this website each year once confirmed by the PSAA Board following consultation.

    We will continue to pool scheme costs and charge fees to audited bodies in accordance with our published fee scale as amended from time to time following consultations with scheme members and other interested parties. Pooling, sometimes referred to as ‘Post Office pricing’, means that everyone within the scheme will benefit from the prices secured via a competitive procurement process, a key tenet of the national collective scheme.

    Additional fees (fee variations) are part of the legal framework. They only occur if auditors are required to do substantially more or less work than anticipated, for example if local circumstances or the Code of Audit Practice change or if the Regulator (the FRC) increases its requirement on auditors. The fee variations process ensures that fees for additional work are robustly assessed and cannot be invoiced until approved by PSAA.

  10. How can PSAA get the message out to all councils about the issues faced by local audit and support both councils and the audit partners in explaining this story?

    We have spoken and written often of the systemic issues facing the local audit system in the communications sent to S151 officers and Audit Committee Chairs, and we will continue to do so. We are also an active member of the Local Audit Liaison Committee, chaired by the FRC from May 2023 and attended by key local audit stakeholders. This enables us to feed in body and auditor perspectives to decisions about changes to the local audit framework, and the urgent need to address audit timeliness.

    Tony Crawley, PSAA’s Chief Executive, gave evidence at the March 2023 Public Accounts Committee (PAC) enquiry on the timelines of local government audit opinions in England. The transcript of the meeting can be accessed on the PAC’s website. The PAC continues to show an interest in the challenges affecting local audit. Steve Freer, PSAA’s Chair, also shared his thoughts in an article that considered the wider local audit landscape in October 2022.