External audit arrangements

Report: 3
Date: 28 September 2000
By: Treasurer

Summary

The report informs the Panel of the new external audit arrangements.

A. Supporting information

Arrangements for external audit

1. Prior to the establishment of the Metropolitan Police Authority, the Metropolitan Police Service was subject to external audit by the National Audit Office (NAO) in line with central government departments and related bodies. The MPA, as a local authority, comes under the aegis of the Audit Commission for external audit purposes.

2. The Audit Commission, which was set up by statute in 1983, sets the framework within which local authority audits are conducted. Its main functions of relevance to police authorities are:

• appointing the external auditors;
• setting standards for external audit through the Code of Audit Practice and regulating quality;
• arrangements for certifying grant claims and returns;
• carrying out national value for money studies;
• defining comparative indicators.

External audit appointment

3. The Audit Commission has to consult audited bodies on its proposals for appointment of the external auditor. The Authority received a report at its meeting on 10 July 2000 and acquiesced in the Commission’s proposal that District Audit should be the appointed auditor for the MPA with assistance from KPMG. KPMG have been involved over the last year, on behalf of the NAO, clearing a backlog of external audit work in relation to accounting years prior to 3 July 2000.

4. In conjunction with the Director of Resources, I have been liaising with the new external auditors for some months. District Audit are already engaged in reviewing the arrangements for Best Value and KPMG will be providing some validation to the work on producing the Authority’s opening balance sheet.

Presentation

5. Kash Pandya, District Auditor, who is leading the external audit of the MPA will make a presentation to the Panel on the approach to the external audit.

B. Recommendation

To note the external audit arrangements.

C. Financial implications

None. The fees for the external audit will be agreed later in the year.

D. Review arrangements

The current appointment of external auditor runs to 31 October 2003. The Audit Commission will have to consult the MPA on its proposals for external audit after that date.

E. Background papers

The following is a statutory list of background papers (under the Local Government Act 1972 S.100 D) which disclose facts or matters on which the report is based and which have been relied on to a material extent in preparing this report. They are available on request either to the contact officer listed below or to the Clerk to the Police Authority at the address indicated on the agenda.

• External Audit Appointment: Report by the Treasurer to the MPA - 10 July 2000.

F. Contact details

The author of this report is Peter Martin.

For information contact:

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

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