This edition of our quarterly e-bulletin includes an update on the local audit backlog situation, details of our new Board and Audit Committee appointments, and a summary of local audit news from elsewhere.
We hope that you continue to find our e-bulletin to be useful. We welcome your thoughts on future topics that you would like us to cover (contact the team).
Content:
- An update on the local audit situation
- Audit opinion data following the December backstop
- Client survey for 2023/24 audits
- PSAA appoints new Board members
- The fee scale for 2024/25 audits
- PSAA’s Advisory Panel meeting
- 2024/25 audits – KPIs and payment milestones
- Local audit news from elsewhere
An update on the local audit situation
On 18 December MHCLG launched a consultation on Local audit reform: a strategy for overhauling the local audit system in England. We welcomed the strategy in our press release. It aims to develop a more cohesive system, geared to the sector’s needs, that provides assurance over the use of public money. The strategy commits to a series of changes to fix the broken local audit system and seek views on a range of potential further measures. Our response to MHCLG’s consultation is published on our website.
The consultation followed the Government’s announcement that it intends to establish a new body for local audit, the Local Audit Office. We issued a press release reiterating our strong support for the Government’s commitment to ‘overhaul the local audit system, so taxpayers get better value for money’.
The 2024 Code of Audit Practice (the Code) completed its Parliamentary processes and is in force. In November the government provided information explaining the context for modified or disclaimed audit opinions, as part of the measures to tackle the backlog of local audits.
CIPFA issued a guide for audit committee members that explains the local audit backstop arrangements in England. It covers key terms, dates, roles and responsibilities.
Audit opinion data following the December backstop
On 19 December we issued a press release on the local government audit opinion position as at 13 December 2024, the backstop date for the years up to 2022/23. The unprecedented number of disclaimed opinions illustrates the scale of the challenges facing the sector and local audit.
We publish data on audit opinion delivery on a monthly basis, covering opinion delivery for the audits from 2018/19 onwards. We will publish updated data until all opinions for a year are delivered.
Client survey for 2023/24 audits
Our client survey seeks to obtain your views on your audit experience. This feedback is important to us as it informs our discussions with the firms and other key stakeholders involved in local audit. The LGA’s Research and Information Team administer the survey for us for independence and transparency, including analysing and reporting on the feedback.
For the 2023/24 audits we are issuing the survey shortly after your auditor has given their opinion. If you received your audit opinion in November or December 2024 you should have received an invitation on 15 January to take part in the survey. If you have not received your email invitation from the LGA please contact us.
You can visit our website for further details or please email our team if you have any queries.
PSAA appoints new Board members
We are pleased to announce the appointment from the 1 February of three new Board members and an independent member on our Audit Committee. Further details of these appointments can be found on our website.
The fee scale for 2024/25 audits
We published the final 2024/25 audit fee scale on 27 November 2024, following consultation in September and October. We emailed all opted-in bodies and other stakeholders to confirm the final fee scale and to share the outcome of the consultation.
PSAA’s Advisory Panel meeting
Our Advisory Panel of Treasurers’ Societies members met on 6 November and focused on the imminent backlog measures with Mike Newbury, Director of Local Audit Code and Guidance at the NAO, as the key speaker. The Panel is due to meet again on 27 February and will feature the latest on the reform of audits and accounts. Iain Murray, Director of Public Financial Management, will provide an update on CIPFA’s plans.
2024/25 audits – KPIs and payment milestones
We have updated some of our audit services contract KPIs, along with the first payment milestone, to reflect the backstop dates for the delivery of audit opinions. The list of KPIs and payment milestones for 2024/25 audits is set out on our website. As a reminder, firms collect audit fees on our behalf, and fees must be paid by opted in bodies following our determination in line with our role as appointing person.
Local audit news from elsewhere
CIPFA LASAAC issued its annual consultation on the 2025/26 Code of Practice on Local Authority Accounting in the United Kingdom (the Code), which will apply to accounting periods starting on or after 1 April 2025. The deadline for responses is 14 February.
In December CIPFA published the Code of Practice on Local Authority Accounting in The United Kingdom: Guidance Notes for 2024/25 Accounts.
On 12 December the FRC published emerging findings on its study into the audit market for NHS providers and Integrated Care Boards.
The NAO issued an Overview of the Ministry of Housing, Communities & Local Government 2023-24 in December as part of their series of overviews for the new Parliament.
The FRC approved CIPFA’s Diploma in Local Audit in November as pre-approved local audit specialist training. This Diploma is the first FRC approved local audit specialist training for Key Audit Partner status applications.
On 19 November the FRC published its annual report on the quality of major local audits, which sets out how it will continue to support the local audit system to recover from delays in the publication of audited accounts.
On 29 October CIPFA published its Bulletin 18 Local audit backlog in England following legislation bringing into effect backstop dates for authorities in England to publish final accountability statements. It explains what this will mean for local authorities.