Report of the Director of Finance and Assurance.
The Committee received a report of the Director of Finance and Assurance, which provided an opportunity to consider the invitation from the Public Sector Audit Appointments (PSAA) to opt-in to the appointment of external auditors for the period 2023-24 to 2027-28.
An officer introduced the report and informed Members that:
- the length of the compulsory appointing period was for five consecutive financial years commencing 1 April 2023
- three options were set out in the report. The officer outlined each of the options, including their advantages, disadvantages and associated risks and stated that the preferred option was Option 3 – to opt-in to a sector led body using the Public Sector Audit Appointments (PSAA) due to the benefits it provided.
The Chair reminded Members that a decision to become an opted in authority had to be made at a full Council meeting in accordance with the Local Audit and Accountability Act 2014 and the Local Audit (Appointing Person) Regulations 2015 (the Regulations). He sought clarification of the role of Governance, Audit Risk Management and Standards Committee in respect of the report. The Director of Finance and Assurance stated that an informal view of the Committee was being sought which would be reported to full Council.
Members asked a number of questions in relation to the pool of accountancy firms available and their specialist areas, whether Members would have any input in the firm appointed including its capacity and staffing situation. The Director of Finance and Assurance and an officer responded as follows:
- nine large accountancy firms were expected to submit bids for the contract(s)
- as part of the process, the Council would be allocated a firm of accountants and it would be for the Council to accept or reject it and provide reasons for its decision. If the reasons for rejecting the first allocated firm were accepted by the PSAA, then a different firm would be allocated. The Director stated that the Society of London Treasurers had received a presentation from the PSAA and that improvements had been made to the process which would also look at the staffing levels of each firm. A testing structure had been established and each firm would be required to pass the tests; otherwise, the firm would not be able to submit a tender for the contract
- the initial decision would need to be made by full Council. It should be recognised that, previously, the National Audit Office allocated a firm to each Council and that for many years, the Council had not been able to appoint its own auditor. Moreover, it was not ‘healthy’ to have the same firm of auditors over many years.
The Chair referred to paragraph 17 of the report and stated that he was satisfied that the procurement process was robust. The firm would need to be both competent and have the capacity to provide a good service. On behalf of his political Group, the Chair spoke in support of Option 3. A Member from the same political Group echoed the sentiments of the Chair.
The Director of Finance and Assurance assured Members that the majority of local authorities were expected to opt-in to a sector led body using the Public Sector Audit Appointments (PSAA).
Members, having considered the advantages and disadvantages, including any associated risks, of the options set out in the report
RESOLVED: That the report be noted.