2024 Published Reports: FRC. PSAA.

Executive Summary. Report for Public Sector Audit Appointments (PSAA). Lessons Learned Review

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Public Sector Audit Appointments (PSAA) - A ‘lessons learned’ review of PSAA’s work to appoint auditors from 2023/24, capturing what went well and where improvements could be made for the next procurement round.

We captured the views of a sample of the 475 ‘eligible bodies’ for whom PSAA procures auditors, all but one of the firms that were approved to carry out local audits during the procurement period, 5 of the Treasurers’ Societies and 6 of the national stakeholders involved with the local audit market.

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The comprehensive report, including detailed findings, has been published by the PSAA.  Key extracts from the reports Executive Summary are as follows:

“In summary, PSAA is seen as having done a good job in the face of major headwinds, including the statutory limitations of its role and a fragile and under-resourced local audit market. Procurement processes work best when the procuring agency can assess the bids received and determine which ones to accept. In the recent procurement, PSAA initially received bids to cover only about 90% of the required work, and it took several rounds of procurement and considerable effort to obtain a sufficient volume of audit supply.

The emphasis of this report is on ‘lessons learned’, and the comments from participants that we have cited reflect this. To this end we have given disproportionate exposure to the more critical and negative comments because these are the ones that contain suggestions for improvement, as opposed to the more numerous positive and supportive comments.

We made the following recommendations, which PSAA have accepted

For eligible bodies:

  • Develop introductory training for newly appointed s151 officers and Audit Committee Chairs, within PSAA’s remit.
  • More involvement for eligible bodies and Treasurers’ Societies in identifying issues and suggesting solutions and approaches.
  • For future market engagement and procurement briefings, send out slides in advance to enable participants to absorb information, consider issues and formulate questions.
  • Clarify PSAA’s role in contract monitoring / management and spell out the limitations of the role more clearly.

For audit firms:

  • In the pre-procurement stage, consider market engagement that is more tailored to each firm’s individual needs, especially for the smaller firms.
  • Review and, if possible, expand the information provided to firms about the local audit market, to remove as much uncertainty as possible.

For wider stakeholders:

  • Engage with national stakeholders to better understand what information PSAA might be able to share, within its remit, to promote the smoother running of the whole local audit system in preparation for the next appointing period.

We have also shared with PSAA several suggestions for improvement made by participants

In most cases, PSAA are already doing what they can within the limits of the current legislation and procurement rules, and it is a tribute to their professionalism that they have agreed to consider many of these suggestions further and to do more if they can.

Most participants were critical of the wider local audit system. There is widespread agreement that the current local audit system is ‘broken’ (as described by several interviewees) and in need of radical reform. Several interviewees said that PSAA should work as closely as possible with other stakeholders to deliver such reform. The issues that most concerned participants were:

  • Market capacity and capability, especially the need for Key Audit Partners (KAPs).
  • Delays in signing off audits and the impact of the backlog on future audits.
  • Standards, regulations, and the role of local government accounts.
  • The fragmentation of key roles between different entities, including PSAA.

PSAA are well aware of these issues, as evidenced in their press release dated 10th October 2023.”

Access the Full Report Lessons Learned Review for the PSAA

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Complete Report for Public Sector Audit Appointments (PSAA). Lessons Learned Review


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