02/2017: Appointment of External Auditors

Executive Summary and Recommendation

This is a Decision Notice outlining the Commissioner’s approach to the appointment of External Auditor’s for 2018/19 and beyond.

Following the closure of the Audit Commission on 31 March 2015 an independent company created by the Local Government Association, called Public Sector Audit Appointments Limited (PSAA) has been responsible for overseeing the Audit Commission’s current external audit contracts from 1 April 2015 until December 2017 or up to 2020. It manages the contracts and exercises statutory powers to appoint auditors and set and determine fees. The PSAA has confirmed the extension of the Mazars LLP contract with the PCC and CC to enable them to audit the accounts for 2017/18.

External auditor appointments must be made for the 2018/19 audit of accounts by 31 December 2017, as required by section 7 of the Local Audit and Accountability Act 2014. Appointments may be made by the audited body itself, by groups of audited bodies, or by a specified appointing person.

Appointments may be made by the audited body itself, by groups of audited bodies, or by a specified appointing person. The relevant regulations require that the decision on which option to take is made by the Corporation Sole.

Based on the options available to the PCC, and as supported by the Joint Independent Audit Committee, it is recommended that the Commissioner agrees that the PCC and CC ‘opt in’ to the PSAA sector led option for the appointment of external auditors for the five financial years commencing 1st April 2018 and authorise the CFO’s to accept the invitation to opt in to the arrangement.

Decision

Police and Crime Commissioner decision: Approved

Signature: 
Date: 26 January 2017
Title: Police and Crime Commissioner

Introduction and background

Following the closure of the Audit Commission on 31 March 2015 an independent company created by the Local Government Association, called Public Sector Audit Appointments Limited (PSAA) has been responsible for overseeing the Audit Commission’s current external audit contracts with audit firms from 1 April 2015 until December 2017 or up to 2020. It manages the contracts and exercises statutory powers to appoint auditors and set and determine fees.

The PSAA has confirmed the extension of the Mazars LLP contract with the Chief Constable and PCC for one year to enable them to audit the accounts for 2017/18. At the conclusion of this audit the contract with Mazars will conclude.

External auditor appointments must be made for the 2018/19 audit of accounts by 31 December 2017, as required by section 7 of the Local Audit and Accountability Act 2014. Appointments may be made by the audited body itself, by groups of audited bodies, or by a specified appointing person.

Appointments may be made by the audited body itself, by groups of audited bodies, or by a specified appointing person. The relevant regulations require that the decision on which option to take is made by the Corporation Sole.

PSAA has been specified by the Secretary of State for Communities and Local Government as the appointing person for principal local government bodies under the provisions of the 2014 Act. This means that PSAA will make auditor appointments to relevant principal local government bodies that choose to opt into the national appointment arrangements PSAA is developing.

PSAA is inviting the Chief Constable and PCC to opt in, along with all others, so that it can procure a number of contracts with appropriately qualified audit firms and appoint a suitable firm to be the Council/Authority’s auditor. The timetable it has outlined for appointing auditors under the scheme means it has now issued a formal invitation to opt into these arrangements.

Formal notification of ‘opt in’ needs to be received by PSAA by 9 March 2017.

Consultations Carried Out

The Audit Committee is responsible for advising the PCC and Chief Constable of Cleveland Police on the appointment of external auditors and as such a report went to their meeting in December 2016. This report considered the changes to the arrangements for appointing external auditors, the options available and what would be the Chief Finance Officers’ (of both the PCC and CC) recommendation to the Police and Crime Commissioner and Chief Constable in this respect. Given the nature of this Decision Notice the PCC CFO did not feel there was any benefit in any further internal consultations on this proposal.

Compliance Checks

Financial Implications/Value for money:
The proposed fees for future years cannot be known until the procurement process has been completed. However, it is expected that the large-scale contracts procured through PSAA will bring economies of scale and attract keener prices from the market than a smaller scale competition. This Decision Note has been compiled by the Chief Finance Officer who is also content that there are no legal or HR implications resulting from this Decision Notice and therefore has not sought specific feedback on these areas.

Public Access to information
As a general principle, the Commissioner expects to be able to publish all decisions taken and all matters taken into account when reaching the decision.  This Notice will detail all information which the Commissioner will disclose into the public domain.  The decision and information will be made available on the Commissioner’s website.

Only where material is properly classified as Restricted under the Government Protective Marking Scheme or if that material falls within the description at 2(2) of The Elected Local Policing Bodies (Specified Information) Order 2011 will the Commissioner not disclose decisions and/or information provided to enable that decision to be made.  In these instances, Part 2 will be used to detail those matters considered to be restricted.  Information in Part 2 will not be published.

All decisions taken by the Commissioner will be subject to the Freedom of Information Act 2000 (FOIA).

Part two

Is there a Part 2 to this Notice – NO

Report Information

Author(s) and Executive Group Sponsor: Michael Porter, PCC Chief Finance Officer

Date created:  17 January 2017

I confirm that all the above advice has been sought and received against this and any associated Part 2 information and I am satisfied that this is an appropriate request to be submitted for a decision

Signature: Michael Porter

Date: 24 January 2017