Consultations on measures to address local audit delays

Published: 6 February 2024

2 minute read

Timely, high-quality financial reporting and audit of local bodies is a vital part of our democratic system. It supports good decision making by local bodies and ensures transparency and accountability to local taxpayers.

The backlog in the publication of audited accounts by local bodies has grown to an unacceptable level. The Department for Levelling Up, Housing and Communities (DLUHC) has worked collaboratively with the FRC, as incoming shadow system leader, and other system partners, to develop measures to address the delay in local audit. The proposals that have been developed maintain auditor independence and enable compliance with International Standards on Auditing (UK) (ISAs (UK)). The proposals consist of three phases:

  • Phase 1: Reset involving clearing the backlog of historic audit opinions up to and including financial year 2022/23 by 30 September 2024.
  • Phase 2: Recovery from Phase 1 in a way that does not cause a recurrence of the backlog by using backstop dates to allow assurance to be rebuilt over multiple audit cycles.
  • Phase 3: Reform involving addressing systemic challenges in the local audit system and embedding timely financial reporting and audit.

The development of these proposals has involved widespread engagement since summer 2023 with auditors and finance teams.

To support the further development and testing of the measures, consultations are taking place, in partnership with the FRC, to receive further feedback and inform the decision on how to proceed. A Joint Statement, issued by all system partners, sets out an overview of the proposals under consultation to support the local audit system to reset and recover. More information on each consultation and supporting material can be found below.

Consultations

DLUHC Consultation on the Accounts and Audit Regulations 2015

DLUHC is seeking views on changes to the Accounts and Audit Regulations 2015 to introduce a backstop date of 30 September 2024 for the publication of audited accounts up to and including 2022/23, and a series of future backstop dates covering the remainder of the PSAA appointment period.

Visit the DLUHC consultation page (external link)

NAO Consultation on changes to the Code of Audit Practice

The NAO is seeking views on changes to the Code of Audit Practice to support auditors to meet backstop dates and promote more timely reporting of their work on value for money arrangements.

Visit the NAO consultation page (external link)

Join one of our virtual roundtables to share your views

We will be hosting a series of roundtables featuring representatives from the FRC, DLUHC, the NAO and CIPFA which will cover the main points across the consultations and provide an opportunity to ask questions. You can see the dates and times for each roundtable in the table below.

These roundtables are open to individuals and organisations operating in the local body financial reporting and audit system, including finance teams, auditors and elected representatives.

If you would like to attend a discussion to hear more about the consultations and share your views, please email [email protected] confirming which roundtable you would like to attend. Please only register to join one roundtable.

Please note we will be recording the discussions for note taking purposes and to share with DLUHC, the NAO and CIPFA as part of their consultation feedback gathering process. Comments made during roundtables may be included in public feedback statements. The FRC will not be publishing the recordings.

  • Thursday 15 February, 11:00 – 12:30
  • Tuesday 20 February, 14:00 – 15:30
  • Thursday 22 February, 10:00 – 11:30
  • Tuesday 27 February, 09:30 – 11:00

Supporting material