Frequently Asked Questions

Public Sector Audit Appointments Limited (PSAA) is an independent company limited by guarantee incorporated by the Local Government Association in August 2014.

In July 2016, the Secretary of State specified PSAA as an appointing person for principal local government and police bodies for audits from 2018/19, under the provisions of the Local Audit and Accountability Act 2014 and the Local Audit (Appointing Person) Regulations 2015. Acting in accordance with this role PSAA is responsible for appointing an auditor and setting scales of fees for relevant principal authorities that have chosen to opt into its national scheme.

PSAA is staffed by a team with significant experience working within the context of the Regulations to appoint auditors, manage contracts with audit firms, and set and determine audit fees. All these roles are undertaken with a detailed, ongoing, and up-to-date understanding of the distinctive context of a highly regulated service and profession which is subject to dynamic pressures for change.

Find out more in the about us section of this website.

As at March 2023, the nine registered firms are: Azets Audit Services, BDO, Bishop Fleming, Deloitte, EY, Grant Thornton, KPMG, Mazars and PWC.

The ICAEW maintain the list of registered auditors.

Firms are required to comply with the Code of Audit Practice (COAP), and when issuing a disclaimed audit opinion under the COAP they must have regard to the statutory guidance, which sets out that they should use professional judgement. 

The firms have performed work to issue a disclaimer opinion in line with the COAP/statutory guidance, which is why specific fees are appropriate for disclaimed audits. Furthermore, Ministerial statements have said that firms would be paid for work done in good faith.

We will consider what work has been done in total when determining the total audit fee – so if the auditor has not done all the work envisaged when we set the scale fee, the total fee will be adjusted to reflect that. For some audits, the total fee will reflect only the work for the VFM arrangements plus the work that the firm judged to be professionally appropriate to deliver the disclaimed audit opinion in line with the statutory guidance. 

Our fee variation process uses a defined set of categories for our review of  fee variation proposals from auditors. This enables us to consider whether proposals relating to additional audit requirements, are proportionate and comparable. We use these categories in our fee variation statements to bodies. Auditors may, however, choose to use different terminology or groupings in their reporting to bodies.

In April 2025 MHCLG announced reforms to the local audit system backed by £49 million to help bodies clear their backlogs and restore audit assurance. The arrangements for distribution of this funding are due to be confirmed soon.

We have chosen not to determine fee variations related to the issuing of a disclaimed opinion until the funding position is resolved. Until that process is complete, we are reviewing all fee variation proposals we receive from auditors but will only determine those not related to the production of a disclaimed opinion. We explained this process in our email of 17 December 2024, sent to all bodies and copied to the firms.

We will communicate the final fee position for each body once we have determined it. When we determine a fee, it becomes statutorily payable. 

The Code of Audit Practice (COAP) sets out what local auditors of relevant local public bodies are required to do to fulfil their statutory responsibilities under the Local Audit and Accountability Act 2014. 

Local auditors must comply with the COAP. Para 2.6 requires auditors to apply the extant auditing standards set for the UK by the Financial Reporting Council as the relevant regulatory body and applicable at all audits both corporate and public sector. 

Where the statement does not include all fee variation proposals requested by your auditor, this may be because our review of some elements is not complete because we are waiting for further information. If we subsequently approve other fee variation proposals, we issue an updated statement.

The evaluation ratio of 80% quality and 20% price for an audit services procurement is consistent with other recently let public sector audit procurement contracts. It differs from our approach to the 2017 procurement as our market intelligence was that firms would not engage with bodies that did not value audit and used ratios of a low quality/high price rating.

We considered the feedback provided and confirmed our approach to retain the 80% quality and 20% price evaluation ratio in the report summarising the outcome of the June 2021 consultation on the draft prospectus.

The proximity of the backstop dates for the up to 2022/23 and 2023/24 audits means that we are receiving fee variation proposals for over 700 audits in a short period. We expect it will take us several months to process all fee variations and we are working to ensure we do so thoroughly, effectively and efficiently. 

The firms are submitting fee variation proposals as and when they are ready to do so. We are therefore dependant on them providing these proposals, and appropriate supporting information, to allow us to complete our work. 

We may therefore issue fee variation statements out of audit year sequence, for example we may be able to complete a particular audit year but are still working on an earlier year. We issue a statement as soon as we have completed our work, to provide bodies and firms with the final fee position as quickly as possible.

Work on VFM arrangements comprises two elements:

• the core work to consider the arrangements in place included in the scale fee. The auditor needed to do this to be able to come to the binary conclusion that was in place up to 2019/20; and 
• the additional work required to produce the commentary, which is a Code of Audit Practice requirement from 2020/21 and is included in the scale fee from 2023/24.

The VFM arrangements commentary fee variation in the statement may be higher than determined for other audit years because it includes the scale fee element for core VFM work.

For bodies where the auditor has only completed the VFM arrangements work and the work to issue a disclaimer opinion, there is no separate scale fee charge.