Agenda item

The Chair gave a brief introduction on the item and noted that the Review has recommended the creation of a new Office of Local Audit & Regulation (OLAR) that would take over the functions of the Public Sector Audit Appointments (PSAA).

Welcomed Peter Fleming (Chair of the IDeA Board) and Steve Freer (Chair of the PSAA) to the meeting, and asked Bevis Ingram (Senior Adviser) to introduce the report.

Bevis gave a brief overview of the Redmond Review and his report:

-        This was an independent review to which the LGA submitted evidence, which was cleared by the Board in November 2019.

-        Noted that Sir Tony Redmond will be speaking to an LGA webinar on 7th October 2020 which will be free to LGA members.

-        Bevis explained that local audit in the NHS was not included in the terms of reference for the Review.

-        Awaiting a Government response on the Review and asked for comments from members to steer the LGA position.

The Chair invited Peter and Steve to present their thoughts on the Review and a summary of the discussions of the IDeA Board.

-        Peter explained that a robust conversation took place the IDeA Board on 9^th September 2020 where concerns were raised with the ability of the recommendations to solve the problems seen around local audit. Argued that Senior Finance Officers need to

-        Argued that changes to audit deadlines and the levels of evidence required could more effectively solve the problems being seen and encourage make public sector audit more attractive to firms.

-        Steve added that by not including Health in the review a dual approach could be created which would lead to greater complexity.

-        Noted that the proposals would be subject to primary legislation and as such will require a long-term implementation period.

In the subsequent discussion members raised the following points:

-        Members noted that increasing capacity within the field of public audit is vital. Such would expand the options available for audit and the field of interpretation. The skill and knowledge level of auditors was also highlighted as an area of dissatisfaction.

-        Concerns were raised on the recommendation to increase audit fees and the burden it would be placed on local authorities. Additional concerns were noted on that the cost of establishing OLAR could be passed onto local authorities.

-        Members noted that Senior Finance Officers have a key role to play in the audit process and have responsibility to provide rigorous financial leadership and reporting.

-        The structure and role for OLAR was also highlighted, where it was felt that it’s role regulating, managing and procuring Audit services would be incompatible with good governance and competition regulations. Members also noted that the proposals would replace a sector led body with a centralised one.

The Chair summarised the discussion and asked officers to prepare a response to the Review in line with members comments. Recommends that LGA needs to make effective and reasoned counter proposals on this matter.

Decision

The members of the Resources Board noted the report.

Action

Officers to prepare a response to the Review in line with members comments.