FRC publishes the results of its major local audit quality monitoring, after the system reset
News types: Statements
Published: 8 July 2025
The Financial Reporting Council (FRC) has reported on the results of its annual quality monitoring of major local audits (MLAs). Alongside this, the FRC has provided an update on how it will continue to support the local audit system to recover from delays in the publication of audited accounts in the local government sector.
The FRC inspected a sample of six NHS MLAs this year. Audits were predominantly for the year ended 31 March 2024. All inspections, of financial statements audits and work on Value for Money (VFM) arrangements, were assessed as good or limited improvements required. Good practice was also identified.
We previously set out how we will support the local audit system to recover and this will continue. For the year ended 31 March 2025, we will:
- Continue to perform six inspections of NHS MLAs.
- Perform no routine inspections of local government MLAs, unless there is a clear case in the public interest to do so. This decision will allow staff and partners at audit firms to focus on rebuilding assurance by completing as much outstanding work as possible.
- Discuss possible thematic work with stakeholders (including the audit firms) on topics which would support the system recovery.
We will not issue a public report on our MLA inspection work this year because it would not be proportionate to our findings or the scope of our monitoring activities.