All relevant authorities listed in schedule 2 of the Local Audit and Accountability Act 2014 (the Act), whether they have opted in or not, are required to comply with Part 3 of the Act in relation to the appointment of local auditors. Section 7 of the Act requires a relevant authority to appoint a local auditor to audit its accounts for a financial year not later than 31 December in the preceding financial year. For the 2018/19 accounts, a local auditor must be appointed by 31 December 2017.
For authorities that have chosen to opt into the appointing person arrangements, PSAA will appoint their auditor for them by 31 December 2017, having consulted the authority about the proposed appointment.
For authorities that have chosen not to opt into the appointing person arrangements, there are two options available for appointing their own auditor. These are to:
- undertake an individual auditor procurement and appointment exercise; or
- undertake a joint audit procurement and appointing exercise with other bodies, those in the same locality for example.
Both these options require the authority to consult and take into account the advice of its auditor panel on the selection and appointment of a local auditor. Section 9 of the Act requires a relevant authority to establish an auditor panel, section 10 sets out the functions of an auditor panel, and schedule 4 sets out provisions applying to auditor panels. An auditor panel must consist of a majority of independent members (or wholly of independent members), and must be chaired by an independent member.
A guide to auditor panels for local government authorities has been issued by CIPFA.
Within the period of 28 days beginning with the day on which the auditor appointment is made, section 8 of the Act requires an authority that has not opted into the national appointing person arrangements to publish a notice that:
- states that it has made the appointment,
- identifies the local auditor that has been appointed,
- specifies the period for which the local auditor has been appointed,
- sets out the advice, or a summary of the advice, of its auditor panel about the selection and appointment of a local auditor, and
- if it has not followed that advice, sets out the reasons why it has not done so.
The notice must be published, if the authority has a website, on its website or in such manner as the authority thinks is likely to bring the notice to the attention of service users.
Authorities that have opted into the appointing person arrangements are not required to establish an auditor panel or to publish a notice under section 8 of the Act.