External Audit Fee 2011-12

Report: 7
Date: 7 July 2011
By: Treasurer

Summary

The Audit Commission has submitted its proposed fee for 2011 -12.

A. Recommendation

That the 2011-12 audit fees be approved.

B. Supporting information

1. The District Auditor has written to confirm the audit work that the Audit Commission proposes to undertake for the 2011/12 financial year at the Metropolitan Police Authority (Appendix 1). The fee reflects the risk-based approach to audit planning set out in the Code of Audit Practice and work mandated by the Audit Commission for 2011/12. The audit fee covers the:

• Audit of the MPA financial statements;
• Value for money conclusion; and
• Whole of Government accounts (WGA).

2. As the audit for 2010/11 has not yet been completed, the audit planning process for 2011/12, including the risk assessment, will continue as the year progresses.

3. The total indicative fee for 2011/12 is £474,720, a reduction in last year’s fee of £41,280 due to the following factors:-

• No inflationary increase in 2011/12
• A cut in scale fees resulting from a new approach to local VFM audit work; and
• A cut in scale audit fees of 3 per cent for local authorities, police and fire and rescue authorities, reflecting lower continuing audit costs after implementing IFRS.

4. The fee above does not include any additional audit work that the Audit Commission may need to undertake on part-year financial statements should the creation of the Mayor’s Office for Policing and Crime go ahead on 1 October 2011. The District Auditor will write again to notify us of this once the relevant legislation has received Parliamentary approval and the accounting requirements and timescales are clearer.

5. The fee also excludes work the Commission may agree to undertake using its advice and assistance powers. These will be negotiated separately

C. Other organisational and community implications

Equalities impact

1. There are no equality and diversity implications directly arising from this report.

Met Forward

2. Having proper arrangements in place to deliver economy, efficiency and effectiveness in the use of resources is key to the delivery of MetForward.

Financial implications

3. None arising directly from this report. The 2011 - 12 audit fee can be met from within existing MPA budget.

Legal implications

4. The duties and powers of external auditors appointed by the Audit Commission are set out in the Audit Commission Act 1998, the Local Government Act 1999 and the Commissioners Statutory Code of Practice.

5. External audit is an essential element in the process of accountability for public money and makes an important contribution to the stewardship of public resources and the corporate governance of public services.

Environmental implications

6. There are no environmental implications directly arising from this report.

Risk implications

7. There are no specific risk implications highlighted by this report.

D. Background papers

None

E. Contact details

Report author: Annabel Adams, Deputy Treasurer

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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