Agenda item

Resolved to Recommend:

1.       to approve the Council opting into the Public Sector Audit Appointment’s Sector Led Body for the appointment of the Council’s external auditors for the audit of the 2018/19 accounts and beyond

Resolved to Recommend:

1.       to approve the Council opting into the Public Sector Audit Appointment’s Sector Led Body for the appointment of the Council’s external auditors for the audit of the 2018/19 accounts and beyond

Reason for Decision

To provide details of the options available to the Council on appointing its own external auditors for the audit of the 2018/19 accounts and beyond.

Corporate Objectives

Modern and efficient council

Monitoring Officer/S.151 Officer Comments

Monitoring Officer:  

No comments to add to the report.

S.151 Officer:

This is a S151 Officer report.

Advice

Councillor Elliot gave the following introduction to the report:

Following the winding down of the Audit Commission, transitional arrangements were put in place to appoint Local Authorities auditors until the completion of the 2017/18 audits.

The Council must appoint a new auditor by December 2017 and can choose one of three options to procure the appointment. In summary

• the Council procures its new auditors alone
• the Council joins with several other authorities to procure the new auditors, thereby slightly increasing its buying power which will probably result in improved terms from the new appointment.
• The Council joins a national body of councils to procure the new auditors, thereby significantly increasing its buying power which will almost certainly result in improved terms from the new appointment.

In order to realise the savings available through procuring auditors jointly with local authorities across the country, it is recommended that Cabinet go with option 3 and appoint the PSAA to procure the new auditors for post 2017.

Councillor Marshall agreed that option 3 was the most sensible however she felt that the report seemed to be open ended. She asked what would the duration of the audit contract be, let by the PSAA on behalf of the opted-in councils.

J Deane explained that for 2017/18 the audit would be carried out by the current provider and that the new appointment would be for 5 years from 2018.

He advised that this recommendation had received the full endorsement of the council’s Audit committee.

Councillor Marshall asked how easy it would be to pull out of the PSAA.

J Deane said having granted authority to the PSAA to appoint an auditor, if the Council wished to change its auditor within the 5-year period it must consult with the PSAA and make the case as to why. If for any reason the council wished to change its auditor during this period it would need to consult with the PSAA who would consider changing the auditors, based on the merits of the council’s arguments. Generally, the reasons for change would be for independence reasons, e.g. if a conflict of interest came to light.

He also confirmed that the contractual relationship would be between the PSAA and the appointed auditor. This would be underpinned by a separate agreement between DBC and the PSAA, granting them the authority to procure and appoint. The Council will be consulted by the PSAA on the proposed appointment as part of the procurement process.  

He assured Members that we would also make representations to the PSAA if we felt that the service the council was receiving was below the standard we expect. He didn’t see the risks of a sub-standard service as any greater under this arrangement than under the direct procurement route – arguably they would be reduced as the levers that could be pulled through the powers of the PSAA (as the holder of very high value contracts) would exert far more force than the levers that would be available only to us.

Councillor Marshall asked if the council could end up with the same auditors as now.

J Deane said it was possible, but the agreement would be on different terms.

Councillor Elliot asked if the council had to use one of the big 4 companies.

J Deane said that the council would go out to tender.

S Marshall added that the PSAA were looking at the 5 firms they have contracts with and they were looking to expand this and encourage more.

Voting

None.