Draft Local Audit Bill published


The draft Bill has been published for consultation and pre-legislative scrutiny. The consultation on the draft Local Audit Bill runs until 31 August 2012.

The main provisions in the draft Local Audit Bill are:

  • The repeal of legislation setting up the Audit Commission (the Audit Commission Act 1998) and provision to transfer assets, liabilities and continuing functions to other bodies.
  • A requirement on local public bodies to appoint an external and independent auditor on the advice of an independent auditor panel.
  • The creation of a new regulatory framework for local public audit, whereby the Financial Reporting Council and professional accountancy bodies would regulate the provision of local public audit services.
  • The transfer of responsibility for setting the high level Code of Audit Practice to the National Audit Office.
  • Powers for the National Audit Office to undertake studies of thematic value for money issues relating to local government, and to access information needed to do so.

Ian Carruthers, Policy and Technical Director at the Chartered Institute of Public Finance and Accountancy (CIPFA), said:

'The draft bill provides welcome clarity on the overall shape of the future local public audit regime, as well as the role of qualified professionals within this. CIPFA will continue to work with partners to develop practical supporting arrangements for the new regime.'

The draft local audit bill also includes consultation on who will operate the NFI in the future.  The draft Bill transfers the Commission’s current data-matching powers to the Secretary of State, who in practice will delegate them to the new operational owner of the National Fraud Initiative which will transfer to a new organisation. The National Fraud Authority, the Department for Work and Pensions and the Cabinet Office (ERG) have expressed an interest in taking on operational ownership of the National Fraud Initiative.