Our strategy during 2023 and 2024
Statement of Strategy
- PSAA supports the systems leadership model that is in the process of being introduced and commits to play an active role in addressing the challenges to move towards a local audit system which is more stable, more resilient, and more sustainable. We will:
- Flag issues identified through our work to the system leader to inform policy priorities, share our thoughts on potential solutions and contribute to their development and implementation;
- Engage with the system leader to inform key areas of our work and to provide updates on progress;
- Provide information, intelligence and data to support problem solving and the production of targeted and meaningful reports on local audit including the annual report on local audit;
- Continue to be an active player at the Local Audit Liaison Committee;
- Contribute, as required, to work led or commissioned by the system leader;
- Continue to work to ensure that our objectives for local audit procurement are aligned with those of the wider system.
Delivering our strategy
- At the time of writing this business plan the role and responsibilities of the shadow system leader are emerging but there are many uncertainties including: how the FRC/ARGA will carry out its role as systems leader, further initiatives from Government, the impact of future NAO reports of interest to the Public Accounts Committee, and more generally the impacts on local government because of the current financial/economic crisis, and the impact on local audit of wider audit reforms.
- Our core functions as an appointing person remain unchanged and we will continue to fulfil the role of an appointing person in accordance with the key principles of how we work. However, strategically we want to set ourselves the challenge of continuing to turn up the dial in terms of the urgency and the nature of the changes which need to be addressed to place the system on a more stable and sustainable footing.
- The breadth of our work is summarised within four themes:
Theme 1 – To fulfil our statutory responsibilities as the ‘appointing person’ to the highest possible standards;
Theme 2 – To call for more urgent and more radical change to address the challenges facing local audit including:
- market development to increase supply and competition
- development and expansion of the local audit workforce
- development of the Code of Audit Practice
- tackling the backlog of delayed audits
Theme 3 – To support systems leadership through being a proactive and committed player within the local audit system; and
Theme 4 – To continue to operate effectively and efficiently.
Work programme for 2023/24 and 2024/25
- The programme of activities and projects sets out our work over the next two years.
- In addition, we will regularly review our programme of activities to ensure we remain focussed on the crucial issues as the changes to the local audit environment unfold over time and to ensure we provide the best possible service to our opted-in bodies.
- Key to our delivery is effective project management with careful, coherent planning to manage the interdependencies, as well as skilful communication, negotiation and outward-focussed relationship management to facilitate significant consultation with opted-in bodies, firms and stakeholders.
Table 1: Our programme of activities and projects
| Activities and Projects | Delivery Timescale |
| Theme 1. To fulfil our statutory responsibilities as the ‘appointing person’ to the highest possible standards | |
| Renegotiation the Memorandum of Understanding with DLUHC to align with changes to the local audit system framework (a commitment in DLUHC’s spring statement 2021). | January to July 2023 |
| Analysis of the state of the local audit market in 2025 to provide an independent review of analysis of critical challenges within the local audit market to inform our consideration of the options for the 2027/28 procurement. | March 2024 to February 2025 |
| Undertake auditor procurements through the DPS as required to enable the appointment of independent auditors to opted-in bodies. | As required |
| Undertake annual fees-related research and analysis to inform the development of the Fee Strategy and provide information to opted-in bodies and auditors on the factors and minimum additional fee ranges associated with specific additional audit work requirements. | January to July annually |
| Set and consult on the annual Fee Strategy to deliver our statutory function to specify a scale of fees that reflects audit risk and complexity, in an open, accountable and transparent way. | July to November annually |
| Undertake regular reviews of our fee variation process to identify opportunities to enhance our approach for the benefit of all parties and to ensure our approach is efficient and effective. | Throughout the period |
| Review of fee scales and the fee variation rate card to assess the options to further improve the accuracy of the scale fees against the current approach to annually incorporate agreed recurring fee variations, and options for setting a rate card for additional work in the next contract. | Review during 2024 |
| Monitor the performance of audit firms in delivering their obligations under our 2017 contracts (including completing the backlog of audits) and manage complaints including those under transitional arrangements. | Ongoing |
| Respond to non-audit service requests, statements of reasons, and notification of audit delays or non-standard opinions and provide data to the NAO, FRC shadow systems leader and DLUHC to enable reporting and identification of trends across the whole of local audit. | Ongoing |
| Publish the annual Audit Quality Monitoring Report (AQMR) for opted-in bodies and other interested parties. | February to March annually |
| Develop and implement updated arrangements for contract and financial monitoring to align with 2022 audit services contracts. | Develop by March 2023, implement from April 2023 |
| Induct new and returning suppliers to our contract management regime so they understand the practicalities of the contract management arrangements. | by March 2023 |
| Help co-ordinate a programme of support for firms who are new to local audit and/or returning to PSAA’s regime working with others in the local audit system particularly the NAO and the FRC. | by April 2023 |
| Activities and Projects | Delivery Timescale |
| Theme 2. To call for more urgent and more radical change to address the challenges facing local audit | |
| Informed by our observations from regular discussions with both opted-in bodies, audit firms and wider stakeholder groups, highlight the urgent need for system change to address the key challenges facing local audit. Our work may include conducting research, writing articles, convening discussions, responding to consultations, one-to-one meetings, and continuing to lobby (either publicly or in working groups) for urgent action to reform the system that remains highly fragile. The FRC’s dedicated local audit unit’s priorities and plans are at an early stage. Once these details begin to emerge, we will develop a plan of action. In the meantime we will continue to seize every opportunity to highlight the need for urgent action to reform and the consequences of inaction. | Throughout the period |
| Activities and Projects | Delivery Timescale |
| Theme 3. To support systems leadership through being a proactive and committed player within the local audit system | |
| Actively contribute to relevant research and projects that are commissioned by the systems leader that seek to address challenges faces the local audit system. | Throughout the period |
| Review our approach to the way that we seek feedback from opted-in bodies on the service they receive to help to ensure it is effective, efficient and appropriate. | Review by February 2023, implement: March 2023 onwards |
| Deliver a programme of Local Audit Quality Forum events such as themed all-day conferences and shorter webinars to stimulate debate on or explain relevant issues relating to local audit by creating a place where those with a responsibility for audit quality can share experiences and good practice, with a particular focus on the critical role of audit committees. | Throughout the period |
Co-ordinated, regular communication and engagement with opted-in bodies and our local audit stakeholders to support delivery of our strategic objectives, demonstrate the value of our work and contribute our views (and hear the views of others) in the development and implementation of changes to the local audit framework including through:
|
Throughout the period |
| Activities and Projects | Delivery Timescale |
| Theme 4. To continue to operate effectively and efficiently | |
Conduct an external Lessons Learned review of our preparations for the second appointing period that:
|
January to December 2023 |
Continue to support our staff to always deliver to their full potential, remain motivated, and feel supported. We will continue to:
|
Throughout the period |
Ensure that our externally provided services meet our requirements and provide value for money and our core systems, processes and tools are resilient, efficiently run, and provide good value and service to opted-in bodies by:
|
Throughout the period |
| Undertake a review of our current arrangements for the provision of support services covering HR, Finance and Payroll, IT and FM, against our business needs. | Review: April to November 2023 |
| Undertake a review of how and where we work to determine the best way forward for the business in terms of location and working practices, including the services that we buy in. This review will be informed by the support services review and developments within the local audit system. | Review: May 2023 to March 2024 |
Continue to ensure efficient and effective governance and decision-making aligned to our statutory functions and good practice by:
|
Throughout the period |
| Implement multi-factor authentication (MFA) across our cloud-based IT systems to increase system security. | During 2023 |
| Implement the new public procurement regulations across the company. | Throughout the period |