LGA creates new company to fill Audit Commission’s demise

THE Local Government Association has set up an independent company in preparation for the demise of the Audit Commission in March 2015.

It will oversee a number of key transitional responsibilities, including the appointment of auditors to local government and parts of the NHS.

The Public Sector Audit Appointments Company (PSAA) will manage contracts with private sector audit firms for the external audit of NHS bodies, the police and local authorities, until at least 2017.

Steve Freer, a former CIPFA chief executive, will chair the new organisation. He will be joined by four non-executive directors, who are currently being recruited.

Jeremy Newman [pictured], chair of the Audit Commission said: “We are confident that Steve Freer understands the importance of protecting the independence of auditors and that he will continue the important aspects of the Audit Commission’s work that are transferring to PSAA.”

The fate of the Audit Commission was sealed by the Local Audit and Accountability Act 2014. The Act granted the Secretary of State power to transfer the its responsibilities to other bodies. Government ministers then selected the LGA to create a transitional body to appoint auditors, set audit fees and manage the audit contracts.

Peter Fleming, chair of the LGA’s Improvement and Innovation Board, said: “The LGA is keen to maintain high quality independent audit arrangements for local public services. We are confident that PSAA will ensure that local public bodies continue to be subject to robust audits and that audit work will continue to be carried out in a cost-effective way.”