2015 Report details for project: The Future of Local Audit

Project name The Future of Local Audit - there are 2 reports for this project: 2014, 2015
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Organisation DCLG (D4) - see all reports for this organisation
Report year 2015 (data is from September 2014)
Category Transformation - see all reports for this category
Description: Disband the Audit Commission and refocus local audit on helping local people to hold councils and local public bodies to account for their spending decisions by: (a) Developing and implementing a new audit regime where all such audits will be regulated within a statutory framework, with oversight by the profession and the National Audit Office (NAO); and (b) Transferring (through outsourcing) the Commission's in-house audit practice into the private sector.
DCA (RAG) Amber
DCA text: As at Quarter 2 there were some key challenging transition points that needed carefully managing to ensure no hiatus or errors. There was a long transition and implementation period to programme completion, during which changes to public bodies and local services continue posing new challenges for audit and value for money. A number of statutory instruments are already in force and further regulations and orders are in the process of being implemented by the time Parliament is dissolved in March to enable the new framework to be in place from 1 April 2015. Audit firms and sector bodies are already well engaged in work required of them from 2017 when current contracts end and new regime begins; comms activity will continue in meantime. Research work on benefits realisation as been initiated. Staff and asset transfer schemes are now in advanced state of preparation together with remaining secondary legislation required to ensure that transitional body is ready to take on contracts and other bodies to pick up their functions once the Commission is closed by 31/03/15. Transition Body Public Sector Audit Appointments (PSAA) is in place and making arrangements for smooth transition of contracts, staff and information assets. Monthly Delivery Boards continue to give oversight of the totality of policy, legislative and structural changes.
Start date 2011-06-30
End date 2012-11-01
Schedule text Since the Local Audit and Accountability Act 2014 received Royal Assent in January 2014, this project has moved into implementation phase. There have been 3 public consultations on various pieces of secondary legislation associated with the framework and 4 commencement orders which have allowed parts of the framework to be introduced to enable transferee bodies to take on some of their functions under the new arrangements. These include the Financial Reporting Council (FRC) - to register supervisory bodies and issue guidance and the NAO - to consult on, and lay, a new code of audit practice.
Baseline £45.08m
Forecast £12.08m
Variance 73.00%
Variance text: Original budget estimates for 2014/15 included the annual cost of in-house auditors. From 2013/14 in-house Audit Commission audit staff transferred to the private sector audit firms that won the outsourcing contracts. The 73% reduction between 2014/15 budget and forecast is a result of this in-house audit work now being undertaken by the private sector as well as savings achieved by the Commission no longer carrying out Comprehensive Area Assessment and Inspection since 2010
Whole Life Cost £45.08m
WLCost text: Savings far outweigh the costs as set out in https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/349418/2014_FINAL_Local_Audit_IA.pdf) There are no anticipated major costs within remainder of the project. The figures are from the Impact Assessment, published in September 2014.
Sourcefile IPA_2015.csv

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Acknowledgement: GMPP data has been re-used under the Open Government Licence.