The Local Audit (Smaller Authorities) Regulations 2015

PART 4 Modification to Schedules to the Act

Modification to Schedule 3 (further provisions about appointment of local auditors)

16.  In relation to an opted in authority the Act has effect as if Schedule 3 were omitted.

Modification to Schedule 5 (eligibility and regulation of local auditors)

17.  Paragraph 3 of Schedule 5 applies in relation to a smaller authority as if—

(a) in sub-paragraph (b) after “sections” there were inserted “1217 (supervisory bodies), 1218 (exemption from liability for damages), 1219 (appropriate qualifications), ”;

(b) after sub-paragraph (d) there were inserted—

“(da) sections 1225 to 1225G (concerning enforcement);”;

(c) after sub-paragraph (e) there were inserted—

“(ea) Chapter 4 (the register of auditors etc);”

(d) after sub-paragraph (f) there were inserted—

“(fa) sections 1251 (fees) and 1251A (duty of the Secretary of State to report on inspections);”;

(e) after sub-paragraph (g) there were inserted—

“(ga) section 1254 (directions to comply with international obligations);”;

(f) after sub-paragraph (h) there were inserted—

“(ha) Schedule 10 (recognised supervisory bodies);”.

18.  Schedule 5 applies in relation to a smaller authority as if for paragraph 4 there were substituted—

“4.   For section 1212 (individuals and firms: eligibility for appointment as a statutory auditor), substitute—

“Individuals and firms: eligibility for appointment as a local auditor of the accounts of a smaller authority

1212.   An individual or firm is eligible for appointment as a local auditor of the accounts of a smaller authority if the individual or firm—

(a) is eligible for appointment as a local auditor under the Local Audit and Accountability Act 2014 as it has effect apart from its application by virtue of the Local Audit (Smaller Authorities) Regulations 2015; or

(b) is eligible for appointment as a statutory auditor under Part 42 of this Act as it has effect apart from its application by virtue of the Local Audit and Accountability Act 2014.””.

19.  Schedule 5 applies in relation to a smaller authority as if after paragraph 4 there were inserted—

“4A.   In section 1213 (effect of ineligibility)—

(a) in subsection (1)—

(i) for “statutory auditor of an audited person” substitute “local auditor of a smaller authority”; and

(ii) at the end, for “statutory auditor “ substitute “local auditor of a smaller authority”;

(b) in subsection (2)—

(i) for “statutory auditor” both times it occurs, substitute “local auditor of a smaller authority”;

(ii) at the end of paragraph (a), omit “and”;

(iii) in paragraph (b), for “audited person” substitute “smaller authority”;

(iv) at the end of paragraph (b), insert “and”; and

(v) after paragraph (b), insert—

“(c) where the local auditor was appointed by a specified person, also give the notice in paragraph (b) to the specified person.”; and

(c) in subsection (8) for “statutory auditor” substitute “local auditor of a smaller authority”.”.

20.  Paragraph 5 of Schedule 5 applies in relation to a smaller authority as if—

(a) in subsection (1) of the inserted text—

(i) for “relevant authority” there were substituted “smaller authority”; and

(ii) for “(3), (4) and (5)” there were substituted “, (4), (5) and (5A)”;

(b) in subsections (2)(a), (4) and (5) of the inserted text for “relevant authority” there were substituted “smaller authority”;

(c) subsections (2)(b) and (3) of the inserted text were omitted;

(d) after subsection (5) of the inserted text there were inserted—

“(5A) This subsection applies if—

(a) P is an employee or a member of the specified person who is responsible for appointing the smaller authority’s local auditor; or

(b) P is a partner or employee of a person falling within paragraph (a), or a partnership of which such a person is a partner.”; and

(e) subsection (7) were omitted.

21.  Paragraph 6 of Schedule 5 applies in relation to a smaller authority as if the text of that paragraph were sub-paragraph (2) and before that paragraph there were inserted—

“(1) In section 1215 (effect of lack of independence) in subsection (1)—

(a) for “statutory auditor” substitute “local auditor of a smaller authority”;

(b) omit “and” at the end of paragraph (a);

(c) in paragraph (b)—

(i) for “audited person” substitute “smaller authority”;

(ii) at the end insert “and”; and

(d) after paragraph (b) insert—

“(c) where the local auditor of a smaller authority was appointed by a specified person also give the notice in paragraph (b) to the specified person.””.

22.  Paragraph 7 of Schedule 5 applies in relation to an opted in authority as if the text of that paragraph were sub-paragraph (3) and as if—

(a) before that sub-paragraph there were inserted—

“(1) Section 1216 (effect of appointment of partnership) is amended as follows.

(2) In subsection (5) for “relevant authority” both times it occurs substitute “specified person”.”;

(b) in that sub-paragraph for “In section 1216 (effect of appointment of partnership) after” there were substituted “After”; and

(c) after sub-paragraph (3) there were inserted—

“(4) In subsection (6)—

(a) in paragraph (a) for “statutory auditor” substitute “local auditor of a smaller authority” and

(b) in paragraph (b) for “audited person” substitute “smaller authority”.”

23.  Schedule 5 applies in relation to a smaller authority as if paragraphs 8 to 15 were omitted.

24.  Paragraph 16 of Schedule 5 applies in relation to an opted in authority as if—

(a) in subsection (1) of the inserted text—

(i) after “appointed” there were inserted “by a specified person”;

(ii) for “relevant authority” there were substituted “smaller authority”;

(b) in subsections (2) and (5) of the inserted text for “relevant authority” there were substituted “specified person”;

(c) in subsection (3)(a) of the substituted text after “local auditor” there were inserted “of a smaller authority”;

(d) in subsection (6) of the inserted text for “authority” there were substituted “specified person”;

(e) for subsection (7) of the inserted text there were substituted—

“(7) In this section, “recognised supervisory body” means a recognised supervisory body under Part 42 of this Act—

(a) as it has effect by virtue of Schedule 5 to the Local Audit and Accountability Act 2014; or

(b) as it has effect apart from its application by virtue of the Local Audit and Accountability Act 2014.”

25.  Paragraph 16 of Schedule 5 applies in relation to a smaller authority which is not an opted in authority as if—

(a) in subsections (1), (2) and (5) of the inserted text for “relevant authority” there were substituted “smaller authority”;

(b) in subsection (3) of the inserted text—

(i) in paragraph (a) after “local auditor” there were inserted “of a smaller authority”;

(ii) in paragraph (b) “relevant” were omitted;

(c) after subsection (7) of the inserted text there were inserted—

“(8) In this section, “recognised supervisory body” means a recognised supervisory body under Part 42 of this Act—

(a) as it has effect by virtue of Schedule 5 to the Local Audit and Accountability Act 2014; or

(b) as it has effect apart from its application by virtue of the Local Audit and Accountability Act 2014.”

26.  Paragraph 17 of Schedule 5 applies in relation to an opted in authority as if in subsection (1) of the inserted text—

(a) for “relevant authority” the first time it occurs there were substituted “smaller authority”;

(b) for “relevant authority” the second time it occurs there were substituted “specified person who appointed the auditor”; and

(c) after “section 1248” there were inserted “, and must ensure that the authority is either not required to pay a fee for the first audit, or is refunded any fee paid”.

27.  Paragraph 18 of Schedule 5 applies in relation to a smaller authority as if—

(a) after sub-paragraph (1) there were inserted—

“(1A) In subsection (1), omit paragraph (a).”;

(b) for sub-paragraph (2) there were substituted—

“(2) Omit subsections (2) to (4) and (6) to (8).”; and

(c) sub-paragraphs (4) and (5) were omitted.

28.  Schedule 5 applies in relation to a smaller authority as if paragraphs 19 to 20 and 23 were omitted.

29.  Schedule 5 applies in relation to a smaller authority as if after paragraph 25 of Schedule 5 there were inserted—

“25A.   In section 1258(4) (service of notices), for paragraph (a) substitute–

“(a) in the case of a person who is eligible for appointment as a local auditor of a smaller authority and who does not have a place of business in the United Kingdom, the address of the recognised supervisory body of which that person is a member under—

(i) Part 42 of this Act, or

(ii) under Part 42 of this Act as it has effect by virtue of Schedule 5 to the Local Audit and Accountability Act 2014;””.

30.  Schedule 5 applies in relation to a smaller authority as if paragraph 28 were omitted.

Modification to Schedule 6 (codes of audit practice and guidance)

31.  Paragraph 1(5) of Schedule 6 applies in relation to a smaller authority as if after paragraph (e) there were inserted—

“(ea) a person specified under regulation 3(2) of the Local Audit (Smaller Authorities) Regulations 2015,”.

Modification to Schedule 11 (disclosure of information)

32.  Paragraph 1(3) of Schedule 11 applies in relation to a smaller authority as if after paragraph (c) there were inserted—

“(ca) a person specified under regulation 3(2) of the Local Audit (Smaller Authorities) Regulations 2015,”.