24 March 2014
Once the Audit Commission closes, contracts for audit services will be managed by an independent, private company to be created by the Local Government Association (LGA).
As of March 2015, acting as a transitional body, it will be responsible for managing the Audit Commission's £85 million audit contracts as well as the Value for Money profiles when it shuts at the end of March 2015. It will also have responsibility for working with the Department for Work and Pensions to enable the continued delivery of the Housing Benefit Count.
The transitional body will be responsible for external audit contracts with private audit firms for both principal audited bodies and smaller bodies, until the new audit framework comes fully into force.
The Audit Commission’s staff will transfer to the independent private company to deliver the transitional body’s oversight functions. These include: appointing auditors; regulating the work auditors do; setting scales of fees for audit work; determining final fees and ensuring the quality of the work provided by the audit firms is of the required standard.
Once a new audit framework comes into force, local public bodies will be required to appoint their own auditors and manage their contracts individually or collectively. This could be as early as 2017, although there is an option available for the Government to extend some or all of the contracts until 2020.