Issue - meetings

The Director of Finance and Business Improvement introduced his report setting out the options open to the Council for routes to procure a new External Auditor.  It was noted that:

·  The Council’s current contract with its External Auditor was due to expire at the end of 2017/18, and the Council would need to appoint a new Auditor before 31 December 2017.  The new Auditor would take on responsibility for examining the 2018/19 financial statements and would deliver their first opinion in July 2019.

·  Suppliers of public audit services in local authorities were required to have permission from the Financial Conduct Authority.  Currently, these services were provided by five suppliers.  More providers might seek permission as decisions moved closer, but it was unlikely that small local independent firms would be able to meet the FCA’s demands, thus limiting the Council’s choice of External Auditor.

·  The procurement alternatives were as follows:

·  Solo Procurement and Auditor Panels

·  Joint Procurement

·  Outsourced Procurement (the “Sector Led Body”) – Procurement via a Specified Person who would have the authority to make Auditor appointment decisions on behalf of those authorities which opted-in to these arrangements.

·  Public Sector Audit Appointments Ltd (PSAA) had issued a prospectus setting out its intention to seek designation as a Specified Person.  PSAA was an independent, not-for-profit company limited by guarantee.  It was established by the Local Government Association and was therefore led by the local authority sector.  It already carried out a number of functions in relation to auditor appointments under powers delegated by the Secretary of State for Communities & Local Government.  PSAA was a not-for-profit company and it stated that any surplus funds from running a local auditor appointment scheme would be returned to scheme members.

The Committee discussed the advantages/benefits and disadvantages/risks associated with the alternative arrangements making reference to the difficulties associated with recruiting and maintaining an Auditor Panel, the loss of control associated with joint procurement and the economies of scale and assured appointment from a nationally accredited panel of auditors associated with outsourced procurement.

In response to questions, it was noted that the PSAA’s prospectus stated that in setting up the new arrangements one of its aims was to make Auditor appointments that took account of joint working and shared service arrangements.

The Committee expressed its support for the option of outsourced procurement.

RESOLVED:

1.  That the latest information on External Audit procurement be noted.

2.  To RECOMMEND to the COUNCIL:  That the option of outsourced procurement, as set out in paragraph 3.9 of the report of the Director of Finance and Business Improvement, be adopted.