Part 2Local authorities: governance and audit

Chapter 3Audit of entities connected with local authorities

Power to appoint auditor

38Power to appoint auditor

1

Subject to this Chapter, F3the Auditor General for Wales may appoint a person to carry out audit functions in accordance with this Chapter in relation to a relevant entity.

2

An appointment under this section is to be for a financial year of the entity.

3

An appointment under this section must be made—

a

before the start of the financial year to which it relates, or

b

in the case of an appointment for the first financial year of the entity, before whichever is the earlier of—

i

the end of that financial year, and

ii

the end of the period of three months beginning with the day on which the F4Auditor General for Wales receives notification in relation to the entity under section F537(2)(a) .

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5

The Auditor General for Wales may make an appointment under this section if (and only if) it appears to the Auditor General that—

a

the entity will be a qualifying Welsh local authority entity at the start of the financial year for which the appointment is made, or

b

in the case of an appointment for the first financial year of the entity, the entity is a qualifying Welsh local authority entity when the appointment is made.

6

Before making an appointment under this section in relation to an entity the F7Auditor General for Wales must consult the entity.

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8

After making an appointment under this section in relation to an entity the F9Auditor General for Wales must notify the local authority with which the entity is connected.

39Power to appoint replacement auditor

1

Where a person appointed by F11the Auditor General for Wales under this Chapter in relation to an entity for a financial year dies, is dismissed or is unable or unwilling to act, the F10Auditor General for Wales may (subject to this Chapter) appoint a replacement in relation to that entity for that financial year.

2

Before making an appointment under this section the F10Auditor General for Wales must consult the entity.

3

After making an appointment under this section the F10Auditor General for Wales must notify the local authority with which the entity is connected.

40Exclusions

1

F12The Auditor General for Wales may not make an appointment under this Chapter in relation to an entity for a financial year if, by virtue of this section, the entity is exempt from audit for that year.

2

A company is exempt from audit under this Chapter for a financial year if it appears to the F13Auditor General for Wales that, for the purposes of Part 16 of the Companies Act 2006 (c. 46), the company is or will be exempt from audit under that Part for that year.

3

A limited liability partnership is exempt from audit under this Chapter for a financial year if it appears to the F13Auditor General for Wales that, for the purposes of Part 16 of the Companies Act 2006 (as that Part applies to limited liability partnerships), the partnership is or will be exempt from audit under that Part for that year.

4

F1A registered society is exempt from audit under this Chapter for a financial year if it appears to the F13Auditor General for Wales that F2—

a

the society is a small society (within the meaning of Part 7 of the Co-operative and Community Benefit Societies Act 2014) for that year, or

b

section 83 of that Act (duty to appoint auditors) does not apply to the society for that year because of a resolution under section 84 of that Act (power to disapply auditing requirements).

5

Subsection (1) does not apply if the entity requests the F14Auditor General for Wales to make the appointment.