Issue - meetings

External Audit Procurement

Meeting: 17/01/2022 - Audit, Governance and Standards Committee (Item 73)

73 External Audit Procurement pdf icon PDF 132 KB

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The Director of Finance and Business Improvement introduced his report setting out the options for the procurement of External Auditors for the financial years 2023/24 to 2027/28.


The Director of Finance and Business Improvement advised the Committee that:


·  2022/23 was the final year of the existing External Audit contract and it was now necessary for the Council to decide on the arrangements for 2023/24 and subsequent years.  The options were to procure independently (or in conjunction with other authorities) or to accept an invitation from Public Sector Audit Appointments Ltd (PSAA)

  to opt into an outsourced procurement.


·  In July 2016 the Secretary of State specified PSAA, a subsidiary of the Local Government Association, as an appointing person responsible for appointing an auditor and setting scale fees for relevant principal authorities that had chosen to opt into its national scheme.


·  The recommendation was that the Council accept the invitation from PSAA to become an opted-in authority for the following reasons:


The administration of procurement would be outsourced, leading to a significant saving in Council time and resources;


Management of the audit contract would be outsourced, again leading to a significant saving in Council effort;


PSAA was better placed than the Council to achieve good value for money from the procurement, owing to its dominant position in the market place;


Outsourcing external audit procurement to PSAA provided assurance that the Council’s statutory obligation to have an external audit would be met;


PSAA had published a Procurement Strategy which reflected lessons learned from the operation of the initial five-year outsourced contracts, for example by placing greater emphasis on quality versus cost when making appointments; and


Whilst there had been serious issues about the delivery of audits over the past four years such as late opinions, lack of skilled and experienced audit staff, increasing demand on Officer time to service audits, low fees but frequent supplements, it was considered that a sector-wide approach to addressing these, led by PSAA, was more likely to improve standards.


In response to questions, the Director of Finance and Business Improvement explained that:


·  It was the responsibility of PSAA to allocate auditors to individual authorities.


·  In terms of an audit supplier having a pre-existing relationship with an opted-in body which prevented it from accepting an audit appointment, he did not think auditing the pension fund which was a separate entity was an example of something which would rule the auditor out.


·  To comply with the legislation, it was necessary for the Council to appoint an auditor to audit its accounts for a financial year by no later than 31 December in the preceding financial year.


RESOLVED to RECOMMEND to COUNCIL:  That an invitation from Public Sector Audit Appointments to become an opted-in authority, in accordance with the decision-making requirements of the Local Audit (Appointing Person) Regulations 2015, be accepted.