PracticeAuditIndependence ‘vital’ if local councils appoint auditors

Independence 'vital' if local councils appoint auditors

Maintaining independence is crucial as local government moves one step closer to appointing own auditors, a panel has warned

INDEPENDENCE must be prioritised if local authorities are to be given the power to appoint their own auditors, a government panel has warned.

The Communities and Local Government Committee said that because the Audit Commission – formerly responsible for appointing auditors to public bodies – is to be abolished, government “bears a great responsibility to create adequate safeguards and to help local [councils] establish capable and independent local audit committees”.

In its report, Audit and inspection of local authorities, the panel called on ministers and the National Audit office to speedily establish a replacement framework focusing on efficacy, efficiency and robustness.

It favoured the creation of a mutual comprising Audit Commission staff, saying this would help drive best practice and break down concentration in the market. The committee also called for a “wide-ranging review of public sector audit” and asked for more details on government plans to intervene in case of serious corporate or service failure.

The Audit Commission cautiously welcomed the report, favouring calls for strong safeguards and an independent chair with a majority of independent members on audit committees, as recommended by the panel.

Already earmarked for closure, the public audit provider reiterated its contribution to the industry thusfar, as well as its support in designing the replacement regime.

Chief executive Eugene Sullivan concluded: “We will fulfil our statutory duties with the continuing resilience and professionalism that our staff have demonstrated since the abolition announcement nearly a year ago.”

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