Section 89 Establishment of Local Audit OfficeI1I2

In the Local Audit and Accountability Act 2014, after Part 1 insert—

“Part 1A

The Local Audit Office

Establishment and constitution

1A

(1)

A body corporate called the Local Audit Office is established.

(2)

Schedule 1A makes provision about the Office, including provision about its constitution and proceedings.

Main objective

1B

(1)

The main objective of the Local Audit Office in performing its functions is to secure the effective operation of the system of audit established by this Act, with a view to meeting the needs of users of the audited accounts.

(2)

That includes, in particular, securing—

(a)

that audits under this Act are carried out to a high standard, and

(b)

that there is a suitable range of persons able and willing to carry out such audits.

Financial matters

1C

(1)

The Secretary of State may pay grants to the Local Audit Office.

(2)

The Office must, on request by the Secretary of State, provide estimates of its income and expenditure.

(3)

The Office may charge a person a fee for the exercise in relation to that person of any of its functions that is not the subject of more specific provision about fees.

(4)

That includes functions under—

(a)

an agreement under section 6B(5)(a), or

(b)

rules or arrangements made for the purposes of Schedule 1C.

(5)

A fee charged by the Office (under subsection (3) or otherwise) need not be calculated by reference to the cost of doing the thing to which the fee relates.

(6)

But the Office must set its fees with a view to securing that, over time, its income from fees is broadly equivalent to such of its expenditure as is not met by way of grant from the Secretary of State.

(7)

In subsection (6)—

(a)

the reference to fees includes other sums payable to the Office by agreement (see in particular section 6B(5)(b)), and

(b)

the reference to setting fees includes agreeing fees and other sums so payable.

(8)

Subsection (9) applies to any sum received by the Office by way of penalty under—

(a)

paragraph 3 of Schedule 1B (penalties against external registration body), or

(b)

arrangements made for the purposes of paragraph 10 of Schedule 1C (penalties against registered local audit provider),

including any interest.

(9)

The Office—

(a)

must pay the sum to the Secretary of State, but

(b)

may deduct any costs incurred by it in connection with the imposition or enforcement of the penalty, so far as those costs are not otherwise recoverable.

Oversight and intervention by Secretary of State

1D

(1)

The Local Audit Office must exercise its functions in accordance with any direction, and having regard to any guidance, given to it by the Secretary of State.

(2)

The Office must comply with any written request by the Secretary of State to be provided with information about the exercise of the Office’s functions.

(3)

Such a request may cover information about the exercise of functions after the request is made.

(4)

No direction, guidance or request under this section may relate to the exercise of functions in relation to a particular relevant authority.

(5)

The Secretary of State must—

(a)

consult the Local Audit Office before giving any direction or guidance under this section, and

(b)

publish any direction or guidance given under this section.”

Schedule 34 makes further provision about the Local Audit Office (including the insertion of the Schedule 1A referred to above).