Agenda item

The Committee received a report that set out proposals for appointing the external auditor to the Council for the accounts for the five-year period from 2023/24.  The current auditor, Grant Thornton, had been appointed as external auditors of the new unitary authority by Public Sector Audit Appointments (PSAA) until the end of 2022/23.

The auditor appointed at the end of the procurement process would undertake the statutory audit of accounts and Value for Money assessment of the Council in each financial year, in accordance with all relevant codes of practice and guidance. The appointed auditor would also be responsible for investigating questions raised by electors and had powers and responsibilities in relation to Public Interest Reports and statutory recommendations.

The Council had a choice of the way that it appointed its external auditors, via the following options:

(i)                  Option 1: National Auditor Appointment Scheme - opt into the arrangements offered by PSAA – benefits, that were explained at paragraphs 1.8 of the Committee report.

(ii)                Option 2: Own procurement arrangement following the procedures in the Act – Challenges, that were detailed in paragraph 1.9 of the Committee report.

(iii)              Option 3: To act jointly with other authorities to procure an auditor following the procedures in the Act – the challenges were the same as detailed at Option 2.

The report recommendation was for the Committee to recommend to full Council (which would be at the 23 February 2022 meeting) to opt into the arrangements offered (PSAA) for the appointment of the External Auditors from April 2023 (Option 1).  The Committee report explained in detail the differences between the options.  PSAA was specified as the ‘appointing person’ for principal local government under the provisions of the Act and the Local Audit (Appointing Person) Regulations 2015, and had built up considerable expertise and experience from the first contract period (since 2017) when circa 99% of Council’s opted in.  They had also worked hard over recent years to address the issues that had arisen such as consulting with the Council on the scale of audit fees and ensuring these reflected scale, complexity, and audit risk.

A Council procuring its own auditor or procuring through a joint arrangement entailed setting up an Audit Panel to oversee the procurement and running of the contract.  This procurement process was an administrative burden on Council staff already struggling for capacity, with ongoing contract management then a further burden.  Possible suppliers were limited to the small pool of registered firms with accredited Key Audit Partners (KAP), with a further difficulty being that the Council would not be able to prioritise its audit over others as Auditors were running at full capacity.

Members discussed the advantages and disadvantages of the available options at length and heard that there was a shortage of specialist accounting firms in the sector. It was possible that through the Council following its own procurement exercise, smaller audit firms could bid which would bring with it a significant risk due to the vast differences between local authority and private sector accounting practices. Nationally, there was a shortage of local Government auditors and even experienced audit firms, including Grant Thornton had encountered difficulties in attracting experienced staff. The Committee suggested that the report itself be revised to further highlight the advantages and disadvantages of each approach ahead of the final report being presented to Full Council.

A Member highlighted that emphasis should be placed on the procurement team knowing the exact needs of the Council to ensure best value for money and quality is received.

The Committee discussed the report and options and it was,

RESOLVED –

(1)   That the report be noted.

(2)   That it be suggested that the Chairman of the Audit and Governance Committee proposes the below recommendation to Full Council, with the Vice-Chairman of the Committee seconding the recommendation.

(3)   That full Council be recommended to opt into the arrangements offered by Public Sector Audit Appointments (PSAA) for the appointment of the Council’s external auditors from April 2023 (Option 1).