Are you able to apply global changes to fees for all contracts when there is a change from the Regulator on what audit coverage is required?

DLUHC previously consulted on fee variation arrangements for changes in audit requirements that relate to the conduct of all or most audits and where a standard cost can reasonably be estimated across groupings of bodies. Based on the positive response to that consultation, DLUHC enabled the changes by updating the Local Audit (Appointing Person) Regulations 2015.

It may not be possible to apply a global adjustment immediately where a new audit requirement is introduced, and local fee variations may be used initially to determine an appropriate additional fee level until we can see if there is a sufficiently clear position of a standard impact.

In setting the scale fees each year, we aim to update fees to reflect current audit requirements for all audited bodies where possible, based on the information available at the time the fee scale must be set. The factors considered may include the appropriateness of global changes for some requirements. As an example, the fee for the additional work needed for the auditor’s value for money arrangements commentary has been consolidated into scale fees on a proportionate basis for all opted-in bodies following introduction of the new requirement.

If auditors are required to do substantially 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 substantially more or less work is needed to complete a Code compliant audit.