The rare step by the House of Commons to appoint an ad hoc Committee to scrutinise the Draft Local Audit Bill not only shows there is widespread unease about the initial proposals to abolish the Audit Commission, but also provides an opportunity to tackle serious concerns about the effectiveness, cost, accountability and transparency of the future audit of public spending, says ACCA (the Association of Chartered Certified Accountants).
The ad hoc Committee, which has called for submissions by October 15, is looking at a range of specific issues around the proposals to replace the Audit Commission, including whether allowing local bodies to appoint their own independent external auditor will work and provide adequate safeguards; if it will lead to a cost saving and whether smaller firms can compete with larger bodies when it comes to the provision of audit services.
ACCA had already warned in 2011 that the draft Bill was not addressing all the checks and balances required for strong public audit, and had called on the Government to consider carefully whether the proposals would place significant amounts of public money at risk or would fail to provide assurance about value for money.
ACCA had also expressed serious concerns about how the decision to abolish the Audit Commission was made, saying there was ‘little excuse for policy that is made on the hoof’ and said it was disappointing the Minister could not provide any evidence to support the predicted £50m of savings that were announced by the Government in August 2010'. It also warned there was a risk that the approach that used the skills and experience of auditors to ensure the efficiency and effectiveness of public services would be lost - an issue which is now being consulted on by the ad hoc Committee.
John Davies, Head of Technical at ACCA, said: 'We are delighted that the ad hoc Committee is to look in detail at a number of specific issues, some of which we raised in our initial response to the proposals. The Audit Commission has already lost a large number of excellent staff because of the abolition plans, and if we are to maintain a level of expertise in a complex and critical area, then it is vital these issues are reviewed and ruled on as quickly as possible.'