For bodies with only VFM arrangements-related fees and the fees for issuing a disclaimer opinion, there will be no separate scale fee charge.
For all other fee variations this will depend on the circumstances of each body. Please note that for a disclaimed audit we will assess separately any fees in relation to audit work in response to elector queries and objections.
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.
PSAA consults annually on the scale fees. 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.
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:
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.
If the body is not satisfied with the response of the auditor, then the matter should be raised with PSAA.
As appointing person, PSAA appoints a firm as auditor to an opted-in body. The auditor is responsible for nominating an individual to act as the Engagement Lead on the audit of a body.
PSAA will consider changing an auditor appointment in extreme circumstances if an opted-in body is dissatisfied, but would expect the body and the auditor to have exhausted all avenues for resolution before doing so. Maintaining the independence of the auditor is an important part of this consideration.
PSAA will consider changing an auditor appointment during a five-year appointing period if a conflict of interest involving the existing auditor is identified, or because of the emergence of new joint working arrangements. The appointing person scheme has the flexibility to provide an audit alternative if required in these cases.
PSAA monitors the quality of audit services provided by audit firms through its contract monitoring arrangements.
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.
The £49 million funding announced by MHCLG in April 2025 is being provided 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 to clear the backlog as part of the wider plan for change to the local audit system.
The funding does not apply for audit opinions that have been modified for reasons other than the requirement to meet the backstop dates. For example, if an auditor has issued a disclaimed or modified opinion because there are fundamental shortcomings in a body’s systems or records such that it is unlikely the auditor would ever be able to give an unmodified opinion, this is not as a result of the backstop requirements.