PracticeAuditLocal government ‘unprepared’ for audit changes

Local government 'unprepared' for audit changes

KPMG's survey shows 44% of local authorities lack the expertise to appoint their own auditors, while a further 24% are unsure of their abilities

ALMOST HALF of local authorities admitted they are unprepared to appoint auditors, just as the government is preparing to hand over this responsibility following the planned closure of the Audit Commission.

A survey by KMPG showed that, for 44% of chief executives, directors of finance and chairs of audit committees, the issue is “not yet on the radar”, and no one on their team had any experience of audit procurement.

Almost one-quarter said they are “fairly” prepared for the process, indicating significant training will be needed before the Audit Commission breathes its last.

Despite this, 70% view appointing their own auditors as a “good thing” and more than 60% are hopeful the change will result in better value for money, although almost 90% are satisfied with their current auditors.

KPMG’s public sector audit partner Mike McDonagh said: “Our research shows that the appetite is clearly there among authorities to appoint their own auditors. They now need a detailed timescale and process in order to proceed. For many this will be completely new territory and the learning curve will therefore be steep.”

Commission appointment of public auditors was desgined to protect independence but the body has been scrapped to save money, despite resistance from stakeholders such as ACCA.

Questioning almost 70 local council representatives, the firm found 78% wanted assurance on key financial risks while 51% were interested in help with internal controls, suggesting a desire for more than calculator-wielding number checkers.

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