Shropshire Star

Auditor could be appointed through independent body

A council’s next outside auditor will be appointed through an independent body to maximise value and efficiency, if councillors agree.

Telford & Wrekin Council HQ

Telford and Wrekin Council’s current deal with Grant Thornton UK LLP expires in 2023, and members will vote how to choose the next contract this week.

In a report, finance, legal and governance bosses say the authority could form a dedicated panel – possibly with other councils – to choose the contractor, but say this could lead to unnecessary costs and “it may be difficult” to recruit the necessary lay members.

Instead, they recommend opting in to Public Sector Appointments Ltd, which will allow Telford and Wrekin to share costs with other authorities and take advantage of a wider pool of candidates.

A full council meeting will take place at The Place theatre, in Oakengates, on Thursday, November 18.

In a report before members, Finance Service Delivery Manager Pauline Harris, Audit and Governance Lead Manager Rob Montgomery and Legal and Democracy Service Delivery Manager Richard Philips say there are three options for negotiating and agreeing the new contract, “with varying risks and opportunities”.

“Option One”, making a standalone appointment, would require the council to set up an auditor panel, they say. A majority would have to be independent, defined as excluding current or former councillors or officers and their close family or friends.

This option “allows the council to take maximum advantage of the new local appointment regime and have local input to the decision”, but the process of recruiting the panel and procuring the contract “is estimated by the LGA to cost at least £16,000 plus ongoing expenses and allowances”, Ms Harris, Mr Montgomery and Mr Philips write. The ability to attract bids might be limited and “it may be difficult for the council to find suitably qualified people” to sit as independent appointees, they add.

“Option Two” is to set up a joint panel with other local authorities. It would, again, need an independent majority but costs would be shared and firms may find a multiple-council contract more attractive.

However, they add, “the choice of auditor could be complicated where individual councils have independence issues, where the auditor has recently or is currently carrying out work such as consultancy or advice”. The council might still need to make separate appointments to get around such a conflict, eroding savings, they note.

“Option Three”, which Ms Harris, Mr Philips and Mr Montgomery recommend, would see the council use Public Sector Appointments Ltd, an independent company incorporated by the Local Government Association.

“The PSAA will be able to negotiate contracts with firms nationally,” they write, noting that Grant Thornton was appointed by this method.

“By offering large contract values the firms would be able to offer better rates and lower fees,” the report authors add.

Conflicts of interest would be managed by PSAA and the council would not need to set up an auditor panel.

This option would give Telford and Wrekin councillors “less opportunity for direct involvement” and the system may require councils “to indicate their intention to opt-in before the final contract prices are known”, but the report authors nonetheless recommend it. They say it would “provide better value for the council and more certainty a suitably qualified and experienced external auditor can be appointed”.

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