Frequently Asked Questions

DLUHC previously consulted on fee variation arrangements for changes in audit requirements that relate to the conduct of all or most audits and where a standard cost can reasonably be estimated across groupings of bodies. Based on the positive response to that consultation, DLUHC enabled the changes by updating the Local Audit (Appointing Person) Regulations 2015.

It may not be possible to apply a global adjustment immediately where a new audit requirement is introduced, and local fee variations may be used initially to determine an appropriate additional fee level until we can see if there is a sufficiently clear position of a standard impact.

In setting the scale fees each year, we aim to update fees to reflect current audit requirements for all audited bodies where possible, based on the information available at the time the fee scale must be set. The factors considered may include the appropriateness of global changes for some requirements. As an example, the fee for the additional work needed for the auditor’s value for money arrangements commentary has been consolidated into scale fees on a proportionate basis for all opted-in bodies following introduction of the new requirement.

If auditors are required to do substantially less work because of regulatory change, then the scale fee would be reduced accordingly. Regulation 17(2) of the Local Audit (Appointing Person) Regulations 2015 enables us to vary fees up or down, where substantially more or less work is needed to complete a Code compliant audit.

We recognise that as part of the drive to improve audit quality the FRC is encouraging use of experts such as valuers, and audit firms can claim additional fees for appropriate use via the fee variations process.

No, acceptance of PSAA’s invitation to opt in means that the body is opted in for the duration of the compulsory appointing period (typically set at five years, so from either 2018/19 or 2023/24).

The only exception is where the body ceases to exist or the body ceases to fall within the classes of authorities for which PSAA is the appointing person.

An eligible body that did not accept the opt-in invitation for an appointing period may request to opt in during the appointing period only:

• for the audits 2023/24 to 2027/28, that is on or after 1 April 2023

PSAA must consider a request as the appointing person in accordance with the Regulations. It must agree to the request unless it has reasonable grounds for refusing it and notify the eligible body within four weeks of its decision with an explanation if the request is refused.

Where the request is accepted, the body will become an opted-in body for the remainder of the appointing period on the date the notice is received by PSAA.

PSAA may recover from the opted-in body its reasonable costs for making arrangements to appoint a local auditor in these circumstances.

For both the 2017 and 2022 procurements, the quality evaluation of tender responses was independently observed by the LGA having put in place assurance to guarantee commercial confidentiality in the process.

Pension funds are not separate legal entities from their administering local authority for audit, and are therefore not listed as relevant authorities in schedule 2 of the Local Audit and Accountability Act 2014.

The auditor appointment to an opted-in local authority includes the audit of the pension fund where the authority is the administering body. The pension fund audit is subject to a separate engagement and scale audit fee, but the auditor appointment covers both the local authority and the pension fund.

Opting into the appointing person scheme removes the need for a body to set up an independent Auditor Panel. The detailed requirements for this are set out in the Local Audit and Accountability Act 2014 and the Local Audit (Appointing Person) Regulations 2015.

PSAA must follow the requirements of the Local Audit (Appointing Person) Regulations 2015.

The information we use to set the scale fees includes the previous year’s fees, fee variations that relate to recurrent requirements, and any new audit requirements.

PSAA consults annually on the scale fees. Individual scale fees are published on this website each year once the fee scale is confirmed by our Board following consultation.

We continue to pool scheme costs and charge fees to audited bodies in accordance with our published fee scale as amended following consultations with scheme members and other interested parties. Pooling means that everyone in the scheme accesses the rates secured via our large-scale competitive procurement process, a key tenet of the national collective scheme.

Additional fees (fee variations) are part of the legal framework. They occur if auditors are required to do substantially more or less work than anticipated, for example if local circumstances or the Code of Audit Practice change or if the Regulator (the FRC) increases its requirements on auditors. Our fee variations process ensures that fees for additional work are robustly assessed. Additional fees cannot be invoiced until we determine them.

We have spoken and written often of the systemic issues facing the local audit system in the communications sent to S151 officers and Audit Committee Chairs, and we will continue to do so. We are also an active member of the Local Audit Liaison Committee, chaired by the FRC from May 2023 and attended by key local audit stakeholders. This enables us to feed in body and auditor perspectives to decisions about changes to the local audit framework, and the urgent need to address audit timeliness.

Tony Crawley, PSAA’s Chief Executive, gave evidence at the March 2023 Public Accounts Committee (PAC) enquiry on the timelines of local government audit opinions in England. The transcript of the meeting can be accessed on the PAC’s website. The PAC continues to show an interest in the challenges affecting local audit. Steve Freer, PSAA’s Chair, also shared his thoughts in an article that considered the wider local audit landscape in October 2022.