The audit regime for parish councils is 'unsustainable' according to the Audit Commission which has set out proposals for reform in a new document.
The paper intends to ‘stimulate debate’ over the issue of auditing of small local authorities and puts forward a number of ideas for discussion, some of which are likely to prove controversial.
Among the ideas on the table are introducing a ‘lighter touch’ regime that might exempt some local councils from audit completely; raising the audit fee to reflect the real costs involved in audit or relaxing the Accounts and Audit Regulations.
Perhaps the most controversial idea is changing the model of audit supply by creating a monopoly or bringing in new suppliers.
The Big Firms, especially KPMG, have long argued that not enough of the audit market from the Commission is open to them, though they are unlikely to want to commit to what might be small amounts of work.
Martin Evans, director of policy at the Commission, said: ‘Local councils, as well as the Audit Commission and its auditors, now consider that the present audit regime is unsustainable.
‘The aim of this paper is to stimulate a debate on the changes necessary to improve the audit process for both local councils and auditors alike.’
Responses to the Commission’s discussion paper, The Audit of Parish, Town and Community Councils, have to be with the Commission by 30 September and comes as the first in a series of so-called think pieces intended to open up debate on a number of issues.