Frequently Asked Questions

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  1. Does PSAA adjust the audit fee proposals submitted by firms for disclaimed audits or approve the fees as submitted?

    We review and determine firms’ audit fee proposals in accordance with 17(2) of the Local Audit (Appointing Person) Regulations. Our work includes looking in detail at the fee variations submitted to assess whether we consider them to be appropriate. When making determinations we consider each individual fee variation and compare similar fee variations across all audit firms. Where appropriate we make adjustments having followed our process. 

    For disclaimed audit opinions, we have reviewed each firm’s audit procedures to issue them. The firms were statutorily obliged to take into account the Local Audit Reset and Recovery Implementation Guidance (LARRIGs) issued in September 2024 by the National Audit Office and endorsed by the Financial Reporting Council, and Ministerial statements had stated that they would be paid for work that they did in good faith to deliver what was needed to meet the requirements of the Code of Audit Practice. 

  2. 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.

  3. 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.

  4. 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.

  5. Firms’ project cost fee variations: Can firms still submit fee variations for body-specific build-back work?

    Yes. This fee variation does not cover work carried out on an individual body’s audit. A firm may submit a separate fee variation, but we will review the scope, evidence and cost before determining the fee.

  6. Firms’ project cost fee variations: Does the fee variation guarantee that a body will regain assurance by a set date?

    No. The fee pays for central project work that enabled firms to respond to the backlog and prepare for build-back. Timing depends on the work required at each body, the quality and availability of evidence, and body and auditor capacity.

  7. Firms’ project cost fee variations: Does this change the 2024/25 scale fee?

    No. The charge is a one-off standardised fee variation. It does not amend the scale fee or create a recurring uplift.

  8. Firms’ project cost fee variations: How did PSAA arrive at the £4.5m total?

    Each firm submitted a project cost return using a common template. We reviewed the work, time and rates claimed. We challenged firms where we needed more evidence and included only costs that it assessed as reasonable and linked to the backlog solution.

  9. Firms’ project cost fee variations: How did PSAA compare the rates used by firms?

    Our standard project cost template included the published 2024/25 fee variation rates chargeable to bodies. Firms completed the template using those rates. We then reviewed the staff time, grades and costs submitted and compared the results across firms to assess whether they were reasonable and consistent.

  10. Firms’ project cost fee variations: How did PSAA take account of audit complexity?

    We grouped the affected audits by the number of audit years subject to disclaimed opinions. A larger number of outstanding years generally requires more planning, coordination and preparation for build-back. PSAA compared each firm’s portfolio profile with its disclaimer and build-back costs and average cost per affected body. It also reviewed the number of affected bodies, the type of work, staff time and rates, and significant differences between firms. The final 7% allocation does not measure each body’s build-back complexity because it covers central project work. We will assess body-specific complexity through the normal fee variation process.