Issue - meetings

To consider the recommendation of the Audit Committee.

Council considered a recommendation from the Audit Committee that Council opt into the national scheme managed by Public Sector Auditor Appointments as the ‘Appointing Person’.

Proposed by Councillor J Boughtflower

Seconded by Councillor T. Fidler

Council resolved that the Council opt into the national scheme as outlined in the report.

To consider a proposal to opt into the national scheme for audit appointments managed by Public Sector Audit Appointments and make a recommendation to Council.

The Chief Finance Officer presented his report regarding the re-tender of external audit contracts for the five year period from 2023/24. 

The process by which external auditors are appointed is set out in local audit regulations.  There were three options available to Spelthorne:

(a)  Opt into the scheme whereby the Public Sector Audit Appointments (PSAA) entity manages the process of inviting bids, evaluation them and deciding which firm audits which council.

(b)  Spelthorne could conduct their own appointment process; this would necessitate creating a special panel, following detailed regulations and a special resource process

(c)  Identify and join with a number of other councils making their own arrangements and create a joint panel with those.

Feedback from other Surrey councils was that they intended to opt into the PSAA option.  It was considered this would give the best outcomes as the alternatives were likely to be more costly, involve a considerable amount of time and resource and it may prove difficult to appoint a qualified auditor. 

It was recognised that there were challenges in the external audit sector for local government in terms of the work required and the fee level set.

The Committee asked if there would be clarity on what extra charges could be expected particularly in view of our investment portfolio.  The Chief Finance Officer explained that whilst all fees would be increased, it was difficult to know to what extent until the bids had been received and evaluated and this would not be known at the time of opting into the scheme.   The audit firms did not know which councils they would be allocated at the time of submission of bids and some authorities had higher levels of commercial activity than others. 

David Eagles, Senior Partner BDO, advised that whilst he was not advocating any particular option, he was aware of some NHS Trusts who had tried and failed to appoint an external auditor through their own process.   There was a genuine risk of capacity issues in terms of the public sector market and so a potential benefit of PSAA was you did guarantee getting an external auditor. 

The Committee resolved to make a recommendation to Council to opt into the national scheme managed by Public Sector Auditor Appointments as the “Appointing Person”.