Agenda item

As previously reported, the external auditor for the audit of the accounts for 2018/19 had to be appointed before the end of 2017.  As such the Committee had agreed in March 2016 to indicate its intention to “opt-in” to the national Sector Led Body.

The Secretary of State had now appointed Public Sector Audit Appointments (PSAA) to appoint local auditors under a national scheme.  Although it was for the Audit Committee to consider this issue, the relevant regulations meant that the full Authority had to determine whether they wished to opt in to this or not.  If so, the timetable required the Authority to formally opt in to this scheme by 9 March 2017. 

Members considered the information relating to the scheme set out in Appendix 1; some of the key points were:

• Auditor appointments would operate for audits of the accounts from 2018/19 and for a period of 5 years.
• The scheme would save time and resources for local government bodies.
• A collective procurement should result in the best prices, keeping the cost of audit as low as possible without compromising on audit quality.
• The Local Audit and Accountability Act 2014 provided that firms must be registered as local public auditors with one of the chartered accountancy institutes acting in the capacity of a Recognised Supervisory Body (RSB). The quality of registered firms’ work would be subject to scrutiny by both the RSB and the Financial Reporting Council (FRC), under arrangements set out in the Act.
• Public Sector Audit Appointments would only contract with audit firms that had a proven track record in undertaking public audit work.
• Scale fees would be determined by the prices achieved in the auditor procurement and hence would not be known until the exercise was completed. However fee levels would be carefully managed by securing competitive prices from firms and by minimising Public Sector Audit Appointments own costs.
• Contracts were likely to be awarded at the end of June 2017, following which Public Sector Audit Appointments would consult on the proposed scale of fees in autumn 2017 and publish the fees applicable for 2018/19 in March 2018.

The Director of Corporate Services proposed the Committee recommend opting?in to the national procurement being undertaken by the Public Sector Audit Appointments to the Authority at its next meeting in February.  This option was more likely to minimise procurement costs and resources, maximise buying power and hence likely to result in the most competitive audit fees and this would also remove the costs of establishing an auditor panel.

Members understood that the national procurement process would be the same as adopted in previous years by the Audit Commission however; concern was expressed around awarding the contract without knowledge of the scale of fees.

Following discussion it was agreed that a separate report be provided to the Authority meeting in February which would include full details of the options and processes involved for the appointment of external auditors as reported previously to the Audit Committee.

RESOLVED:-  That the Committee refer a decision to the full Authority at its meeting in February 2017.