Smaller authorities face audit fee relief

13 Jul 00
The Audit Commission is considering a radical review of its fee structure and audit process so that small local authorities pay lower amounts.

14 July 2000

Dame Helena Shovelton, Audit Commission chair, told Public Finance that commissioners discussed a paper on this subject last week. She said that although small authorities and parish councils do generally pay less for their audits, the differential 'just doesn't feel low enough'.

But she insisted that any change would not require a subsidy from larger authorities. It could involve a different type of audit for smaller councils or the use of more cost-effective local firms. 'It would be a matter of trying to work out a different basis on which we would charge the fee,' she said.

Shovelton was speaking as the watchdog published its annual report for 1999.

She said the commission had taken on board recent criticisms from the Environment Select Committee that smaller authorities were facing a disproportionate financial burden.

The committee recommended that authorities with populations under 50,000 should be subject to lower audit fees. It also described the relationship between the Commission and District Audit (DA) as 'cosy' and called for the process of market testing between DA and private firms to be phased out.

But Shovelton defended market testing, suggesting that it kept fees down and quality levels high. 'If anyone has been through a market testing experience, I can assure you it is anything but cosy,' she said.


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