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Speed a priority in auditor appointment

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When the Government published its latest proposals for the future of local public audit it certainly resulted in much discussion here at the Local Government Association.

It’s not that members have a huge appetite for the detail of the Audit Code or the role of Recognised Supervisory Bodies - instead there was a strong sense of frustration - across the political parties - about the pace of change and the bureaucratic proposals for independent Audit Panels.

We understand the need for legislation to implement the proposals, but it appears the earliest auditors can be appointed by councils is 2015-16 - some five years after the original announcement.

Worse, this could be delayed to 2017-18 if the outcome of the Audit Commission’s current procurement process leads to auditors being appointed for five years rather than three.

Unless there is a significant difference in the tender prices, we would strongly support the adoption of three year contracts, giving councils the freedom to appoint their own auditors at the earliest possible opportunity.

Councils remain unconvinced about the need for appointments to be made based on advice from an independent audit panel, independently chaired, with a majority of independent members. This is an unnecessary layer of bureaucracy and councils will have real difficulties finding enough independent people to fill these positions.

The other changes should be more than sufficient to guarantee independence and the maintenance of the highest professional standards. A new regime of registration of firms, followed by monitoring and enforcement of standards, will be undertaken by professional bodies. They will be regulated by the Financial Reporting Council and all appointments will follow a transparent and democratic process.

We in principle support proposals to give councils the freedom to appoint their own auditors - but councils are keen to do so as quickly as possible and are looking for a regime which balances the need for independence with a minimal amount of bureaucracy.

The Government should reconsider plans for these unnecessary independent audit panels, and most importantly, must ensure that the process allows councils to appoint auditors as quickly as possible.

Peter Fleming (Con), leader, Sevenoaks BC and chairman of the LGA Improvement Board

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