Frequently Asked Questions

For disclaimed audit opinions, we have reviewed each firm’s audit procedures for issuing such opinions. Firms were statutorily obliged to take account of the Local Audit Reset and Recovery Implementation Guidance (LARRIGs) issued by the National Audit Office in September 2024 and endorsed by the Financial Reporting Council.

Ministerial statements have confirmed that firms will be remunerated for work undertaken in good faith to meet the requirements of the Code of Audit Practice.

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.

PSAA reviews fee variation submissions in accordance with the Local Audit (Appointing Person) Regulations. We assess the evidence provided by audit firms, including the reason for the additional or reduced work, the work completed, the hours and staff grades used, and the amount claimed. We consult with bodies, consider their comments and compare similar requests across firms and bodies to ensure a consistent approach before determining any additional fee. Where appropriate, we may request further evidence and will reduce or reject any amount that is not adequately supported.

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.

We have discussed emerging audit developments with audit firms and considered their potential impact on future audits. While recent LGPS reforms may have audit implications, there is currently insufficient evidence to quantify any recurring audit impact and therefore no additional fees are proposed at this stage. We will continue to monitor developments as further information becomes available.

We will first add or remove any approved recurring body-specific adjustment from the 2025/26 scale fee. We will then apply the 3.0% contractual increase to the resulting subtotal. The calculation example in this consultation illustrates this approach.

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.