To consider the options for appointing an External Auditor from 2018/19 and to recommend the preferred option to Council.
Contact:C Mason 388157 A Forth 388605
Minutes:
With the aid of a report by the Finance Manager (a copy of which is appended in the Minute Book) the Committee considered the options of appointing an External Auditor from 2018/19.
It was explained that following the abolition of the Audit Commission the Government granted external audit contracts to Public Sector Audit Appointments Ltd (PSAA) on 1 April 2015. The audits were due to expire following conclusion of the audits of the 2016/17 accounts. However, were able to be extended for a period of up to three years by PSAA, subject to approval from the Department for Communities and Local Government (DCLG).
In October 2015 the Secretary of State confirmed that the transitional provisions would be amended to allow an extension of the contracts for a period of one year. Resulting in authorities needing to either undertake their own procurement or to opt in to the appointed person regime for the audit of the 2018/19 accounts.
The Committee were advised that the Local Audit and Accountability Act 2014 provide each Local Authority with three options:
i. To opt in to an approved Sector Led Body (SLB) and DCLG act as the Appointing Person on behalf of opted in Local Authorities;
ii. To establish an independent Audit Panel. The Panel would comprise a majority of wholly independent members and must be chaired by an independent member; or to
iii. Establish a joint Auditor Panel to carry out the function on behalf of two or more bodies.
The Committee were referred to paragraph 3.3 of the report which detailed the advantages of using PSAA.
It was suggested that the Committee recommend to Council to opt in to the appointing person arrangements made by PSAA for the appointment of an External Auditor (also known as the SLB).
The establishment of an Auditor Panel and for the Authority to conduct its own procurement was not recommended as it would be a resource intensive process without the economies of scale of the SLB procurement and would likely result in a more costly service.
The establishment a joint Auditor Panel to carry out the function on behalf of two or more bodies was not recommended as following consultation with Cambridge City Council and South Cambridgeshire District Council there was little appetite for a joint procurement exercise.
In response to a question regarding who would monitor an independent Audit Panel made of wholly independent members it was explained that the Council would be responsible for the procurement and Government would be responsible for the auditing of the Panel.
It was noted that until either procurement exercise was complete it was not possible to identify what additional resource might be required for audit fees in 2018/19. However, in response to a question it was explained that any increase would be minimised through using PSAA as they operated on a not for profit basis and distributed any surplus funds to scheme members. Whereupon the Committee
RESOLVED TO RECOMMEND
that the Council opt in to the appointing person arrangements made by Public Sector Audit Appointments for the appointment of External Auditors.
Supporting documents: