Changes to the smaller authorities' local audit and accountability framework: a guide

When the Transparency Code came into effect, we erroneously thought that smaller (exempt) authorities which are parish councils with a turnover of £25,000 or less, would not be required to have an external audit provided they published the required information on their website.

WRONG! 

DCLG  issued guidance on 11th March called 'Changes to the smaller authorities' local audit and accountability framework: a guide'  to clarify what the requirements will be after the closure of the Audit Commission on 31st March 2015.

The changes are:

• The Audit Commission which appointed Mazars as external auditors for Berkshire will close at the end March 2015
• Responsibility for appointing auditors transfers to a new company called Public Sector Audit Appointments Ltd.
• The current contract with BDO probably expires with completion of the 2016/17 audit
• Continue to prepare accounts in the form of an annual return, in accordance with proper practices set out in Governance and Accountability for Local Councils
• From 1st April 2015 and beyond it is for the RFO to set the commencement date for the exercise of public rights to inspect the accounts, not the auditor. For 30 working days from the commencement date the accounts must be available for inspection. The inspection dates must include a common inspection period of the first 10 working days of July.
• Parish meetings are exempt from the Transparency Code
• The Transparency Code is mandatory from April 2015 and by July 2015 smaller authorities must publish:

1. all items of expenditure above £100
2. end of year accounts
3. annual governance statement
4. internal audit report
5. list of councillor or member responsibilities
6. the details of public land and building assets
7. minutes, agendas and meeting papers of formal meetings

Note point 7 - draft minutes from all formal meetings must be published not later than 1 month after the meeting; agendas and papers must be published not later than 3 clear days before the meeting. They must all be published on a website.

• By 31st December 2016 smaller authorities will need to have appointed an external auditor for 2017/18 accounts. It is likely that NALC, possibly in conjunction with LGA, may become an appointing 'sector led body' which appoints auditors in bulk, as the Audit Commission did.
• The guidance states that smaller councils from 1st April 2017 will not need to have an annual assurance review BUT an auditor must be available to answer questions/objections from electors.
• If your council chooses not to use the sector led bodies appointed auditor then your council must - take the decision at full council; notify the appointing body by the set deadline: establish an independent auditor panel to advise on the appointment  of the auditor and procure an auditor.