Audit Commission’s successor, PSAA, up and running

Public Sector Audit Appointments (PSAA), the independent company established to take on responsibilities related to local public audit following the Audit Commission’s closure yesterday, is now up and running. 

The PSAA was formed to take on a number of transitional responsibilities until at least 2017, including the appointment of auditors to local government and parts of the NHS. 

However, under the Local Audit and Accountability Act 2014, the secretary for state for communities and local government has the scope to extend the transitional arrangements until March 2020. 

Steven Freer, chair of the PSAA, a wholly-owned subsidiary of the Improvement and Development Agency, said: “The team will work hard to ensure the transition is as smooth as possible with the emphasis on continuity and maintaining high standards of auditing.” 

Under the Local Audit and Accountability Act 2014, ministers selected the LGA to establish the transitional body to appoint auditors, set audit fees and manage the audit contracts. 

An LGA spokesman said: “The LGA is keen to maintain high-quality independent audit arrangements for local public services. We are confident that PSAA will ensure that local public bodies continue to be subject to robust audits and that audit work will continue to be carried out in a cost-effective way.” 

The LGA added that a TUPE-like transfer has enabled experienced staff from the Audit Commission's Audit Compliance Team to make a seamless transition to the new company. 

Also, the statutory functions being transferred to PSAA include maintaining analysis tools such as value-for-money profiles and the fee comparators, which enable all audited bodies to check whether they are getting value for money, as well as, for the time being, responsibilities for specifying the arrangements for certification of the housing benefit subsidy return. 

Originally, the Audit Commission’s counter-fraud activities were to be transferred to new organisations. The National Fraud Initiative’s (NFI) data matching service, for instance, has been transferred to the Cabinet Office. 

However, plans for the remainder of its counter-fraud staff and functions, including the Protecting the Public Purse series and fraud briefings, which were expected to transfer to the Counter Fraud Centre, run by the Chartered Institute of Public Finance and Accountancy (CIPFA), appear to be off.  

Government documents reveal that to “preserve the legacy” of the Audit Commission’s counter-fraud work it will publish relevant counter-fraud tools and outputs online. Also, in a ‘future functions at-a-glance’ document for the Audit Commission, it says that from 1 April 2015 onwards counter fraud will be dealt with through the Commission’s archived website. 

To learn more about the PSAA and its functions, click here.  

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