Delayed audit opinions are a major blight on local government’s assurance framework, and it is no surprise they have attracted the strongly expressed concerns of the Public Accounts Committee.
At the start of 2022, 60 per cent of the sector’s 2020/21 opinions were still outstanding, and fewer than 30 of the new ‘value for money’ commentaries had been issued.
Many commentators, including PSAA, have stated that there is no easy, instant solution, and that turning this around may take a number of years.
Progress will require a coordinated effort across the system, and it was encouraging to see the Department for Levelling Up, Housing and Communities (DLUHC) issue a package of measures to tackle this challenge in December.
This included £15 million a year for the next three years for increased audit fees – a welcome recognition of the ongoing impact of audit reforms on the work needed to satisfy regulatory requirements.
The measures include actions for the DLUHC, professional bodies, the LGA, HM Treasury and the Financial Reporting Council, and covers matters such as the accounts and audit scope, new routes to becoming a ‘key audit partner’, sector-specific training, refreshed guidance for audit committees, and an audit workforce strategy.
DLUHC also referenced how PSAA is gearing its upcoming procurement to the current challenges, including doing all we can to encourage new entrants to the market.
We are grateful to the Institute of Chartered Accountants in England and Wales for helping to facilitate potential new suppliers engaging with the opportunity. We also welcome the support of the LGA and others in encouraging as many eligible bodies as possible to opt in to our national scheme.
They recognise that the best chance of securing enough audit supply capacity is to act together in a coordinated, collaborative effort. The deadline for opting in is 11 March.
PSAA is committed to doing everything we can to help the system recover and make positive progress. We hope that as many bodies as possible will join us on that journey.