Frequently Asked Questions

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  1. Is there an issue with the contract management being at one step removed under the PSAA regime, which is perhaps the price for the benefits of centralised procurement?

    The local audit framework, the respective roles of the different players, e.g. the FRC, the NAO, ICAEW, CIPFA, DLUHC and PSAA, and the nature of public audit means that any contract for the delivery of a code-compliant local audit will be different to a normal services contract.  PSAA (or local bodies) cannot specify the audit work or its depth, and by necessity local auditors are independent once appointed.

  2. My organisation now falls below the smaller body threshold – do we have to remain with PSAA for the duration of the contract or can we change to SAAA now?

    If your organisation meets the requirements to be treated as a smaller authority, it will automatically fall under the SAAA regime unless it opts to be treated as a ‘full audit authority.’

    PSAA contracts with supplier firms to deliver audits for organisations that require an audit under the Local Audit and Accountability Act 2014.

    Your organisation is covered by PSAA’s contractual arrangements for any financial years where an audit under the Code of Audit Practice is required. If your organisation has previously chosen to be a ‘full audit authority’ then it can decide to prepare accounts and change to being treated as a smaller authority through SAAA’s regime at any time.

  3. My organisation’s income and expenditure falls below 2025/26 £875 million threshold but is being charged a fee for additional procedures resulting from being a Major Local Audit (MLA)

    If your organisation is not an MLA in 2025/26 then a fee should not be charged as long as you do not also administer a pension fund that is an MLA. The MLA definition applies to the accounts of local authorities that administer pension funds, thus in this case a fee would be charged. Under the Local Audit (Professional Qualifications and Major Local Audit) Regulations 2014, MLA-relevant authorities include those maintaining a pension fund with either more than 20,000 members or gross assets exceeding £1,000 million.

  4. Our audit is delayed as the auditor has overrun in their NHS work. Can the deadlines for health and local government be extended?

    We have called for co-ordination of audit deadlines by government departments, but these deadlines are set by DHSC and DLUHC respectively.

  5. Our current auditor disagreed with the approach taken by the previous auditor creating a large amount of work in terms of cost, time and effort. How does this work efficiently or even reliably?

    Once appointed, auditors are independent and the decisions they take are down to their professional judgements. There may be differences in judgement between years by individuals from the same firm as views change or where more evidence becomes available.

  6. Our fees always seem to have an adjustment for work for new standards or legalisation – why can’t this be in the scale fees to provide certainty?

    Local audit regulations require PSAA to set the fee scale before 1 December of the financial year to which the audit fees relate. This deadline often precedes full visibility of the impact of any changes.

    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 possible. Please note that we do not include contingencies within scale fees.

  7. Should the move to Universal Credit be resulting in a reduction in the Housing Benefit Subsidy Work

    PSAA has no power under the Local Audit and Accountability Act 2014 or the Regulations to make arrangements or appointments for assurance on grant certification claims and returns.

    Certification requirements for Housing Subsidy are set by the Department for Work and Pensions (DWP) and delivered under a tri-partite agreement between DWP, the local authority, and the supplier firm. These requirements are outside the scope of the Code of Audit Practice.

    However, the auditor of a local authority’s financial statements will need to obtain assurance over accounting entries related to benefit payments. We will continue to monitor developments and assess the impact of any changes on this work.

  8. The fee variation process takes a long time. What is PSAA proposing to do to improve this?

    PSAA has a robust process to review all fee variations submitted. The process is carried out diligently in line with the expectations of the Local Audit (Appointing Person) Regulations 2015 (Regulation 17(2)). PSAA is conscious that when a determination is made it is legally binding on both an auditor and the audited body, and that it is public money being transacted. This can take some time, especially as the balance between scale fees and the volume of additional fees was never envisaged to be as it is now. It has brought in additional capacity to help process the increased volume.

    Other factors include that firms can take time to submit variations and supporting information, and arranging a meeting with the body can sometimes take a while to achieve.

    The process is not protracted if information provided by the auditor is sufficient to enable PSAA to comply with its statutory duties in assessing a fee variation. A change in February 2022 to the Local Audit (Appointing Person) Regulations enables the scale fee to be set in November, closer to the start of audit work the following year. This should lead to a reduction in the number of audits that require scale fee variations. If necessary, in the case of significantly protracted audits we can approve interim fee variations.

  9. We are a new body created after the opt-in period closed, can we join the scheme?

    A newly established eligible body has the right to opt in by giving notice to PSAA.

    An eligible body who was invited to join but declined only has the right to request to become an opted-in authority.

    The notice must confirm the body’s decision to opt in, and must specify the body’s postal address. The body will become an opted-in authority for the remainder of the appointing period on the date the notice is received by PSAA.

    New bodies which meet the definition of smaller authority (s6 of the Local Audit and Accountability Act 2014) where the higher of the authority’s annual gross income and expenditure does not exceed £6.5m, fall within the arrangements of the Smaller Authorities Audit Appointments Limited.

  10. We have a disclaimed opinion – are we still expected to pay the full scale fee?

    The audit fee will reflect the volume of work done. For bodies where fees relate only to VFM arrangements and the issue of a disclaimer opinion, there will be no separate scale fee charge.

    For all other fee variations, the approach will depend on the specific circumstances of each body. Please note that, in the case of a disclaimed audit, we will separately assess any fees associated with audit work undertaken in response to elector queries and objections.