Frequently Asked Questions

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

The information we use to set the scale fees includes the previous year’s fees, fee variations that relate to recurrent requirements, and any new audit requirements. We consult annually on the proposed fee scale, and individual scale fees are published on this website each year once the fee scale is confirmed by our Board following consultation.

We continue to pool scheme costs and charge fees to audited bodies in accordance with our published fee scale, as amended following consultations with scheme members and other interested parties. Pooling means that everyone in the scheme accesses the rates secured via our large-scale competitive procurement process, a key tenet of the national collective scheme.

Additional fees (fee variations) are part of the legal framework. They 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 requirements on auditors. Our fee variations process ensures that fees for additional work are robustly assessed. Additional fees cannot be invoiced until we determine them.

Our audit contracts provide for an inflationary increase for 2025/26 audits, based on the ONS annual CPI rate published prior to 1 April 2025, which was 2.8% on 26 March 2025. The increase applies to 2025/26 scale fees and the hourly rates for additional work submitted as fee variations.

The local audit regulations require PSAA to specify the fee scale before 1 December of the financial year to which the audit fees relate. When we consult on and set the fee scale, we aim to update fees to reflect changes in audit requirements. These have changed significantly in recent years due to increased regulatory challenge on audit quality, updated auditing and financial reporting standards, and the move to a VFM arrangements commentary.

If a change in audit requirements is substantial and we can reliably estimate the additional fees, we will incorporate them into the fee scale as soon as we can. If we need more information, we use the  fee variations process in the interim to assess the ongoing additional work and fees needed. 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.

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.

Our current arrangements for measuring the quality of the delivery of audit services are published. Our approach to tender evaluation for the 2022 audit services procurement reflected those areas which opted-in bodies told us are important to them. We sought input from the FRC in developing our approach. The themes and their weightings are as follows:

• Approach – including the transition between audit firms (10%)
• Audit delivery – quality assurance and capability (25%)
• Audit delivery – resourcing and capacity (20%)
• Communication (20%)
• Social value (5%)

Please note that it is the FRC that assesses the quality of the firms’ audit work in line with its statutory responsibilities.

A decision to become an opted-in body must be taken in accordance with the Regulations that is by the members of an authority meeting as a whole, except where the authority is a corporation sole, such as a police and crime commissioner, in which case this decision can be taken by the holder of that office.

The requirement for the Full Council of an authority to make the decision to opt into the PSAA (appointing person) scheme is set out in section 19 of the Local Audit (Appointing Person) Regulations 2015. It is not a matter that is under PSAA’s control.

The opportunity for existing eligible bodies to become an opted-in authority for the appointing period 2023/24 to 2027/28, closed on 11 March 2022. General details about the process for the first two appointing periods can be found at appointing period 2018/19 – 2022/23 or appointing period 2023/24 – 2027/28.

The procurement of audit services for opted-in bodies is a key component of the appointing person arrangements.

Ahead of each audit services procurement PSAA develops and publishes a procurement strategy that is shaped by market conditions and the views of eligible bodies and local audit stakeholders.

Details of PSAA’s previous audit procurements are published on its website: the outcome of its procurement in 2022 for the appointing period 2023/24 to 2027/28, and the outcome of its procurement in 2017 for the appointing period 2018/19 to 2022/23.

There are no direct repercussions for the audited body, but we recognise the problems that delayed audits cause.

The Accounts and Audit Regulations 2015 set out the requirements for publishing accounts. There is a statutory deadline for the publication of audited financial statements, but this is only applicable when the body has audited accounts to publish. As a result, Reg 10(2) provides that where an audit of accounts has not been concluded by the specified publishing date then an authority must publish a notice stating that it has not been possible to publish the statement of accounts and its reasons for this. The wording of the notice is at the discretion of the authority.

We work with firms to improve matters where service has fallen short, but our contractual options are limited. Our aim is to get to a position where we can replace auditors who do not meet the quality measures within our contracts and are not able to resolve the issues. However, this would require a more buoyant market of local audit suppliers than is the case in 2023.

The FRC’s Ethical Standard precludes contracts that contain fees that vary according to a pre-determined measure (for example specifying a date by which an audit opinion must be given). We robustly scrutinise firms’ proposed fee variations for additional work in line with our published process. This includes discussions with individual bodies before making determinations.

Under the Local Government Pension Scheme there is an administering body that oversees the pension fund for an area, for example a county council. That body administers the scheme on behalf of ‘admitted bodies’ in the area such as district councils.

The admitted bodies’ pensions figures will be material and are largely estimated. The auditors of the admitted bodies write to the auditor of the administering body requesting information and evidence on the operation of the pension fund on matters such as the controls over membership information, to enable them to complete their audit of those material figures. The administering body’s auditor then responds to them (the IAS 19 letter). This avoids the administering body having to deal with all of those auditors directly, and so is the most efficient option. 

The administering body Scale Fee includes the cost of the IAS 19 audit work for admitted bodies that are covered by the Code of Audit Practice. We have updated that cost to standardise it across all firms and to ensure that the number of bodies is correct.

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 fee variation process considers how additional fees have been reported to the body and checking whether or not the audited body has agreed the fee variation proposal, based on the information provided by the auditor. In cases of disagreement, we ask the body to provide a summary of the issues and if possible we arrange a call to discuss the concerns. Ultimately though we are required to come to a determination taking into account all of the information available to us.