20 Accepted

The Department confirmed that ARGA would be accountable to the Secretary of State for Business,...

Conclusion
The Department confirmed that ARGA would be accountable to the Secretary of State for Business, Energy and Industrial Strategy.50 The Department explained that it would hold Accounting Officer responsibility for the local government role of ARGA and for all aspects of the local government audit and accountability system, including public interest reports which enable auditors to put into the public domain their concerns and recommendations for action on matters that come to their attention in their work.51 The Department added that it would need to work within the oversight arrangements for ARGA, to ensure that the interests of local government were properly reflected and represented.52 45 Qq 22, 23 evidence session of 20 May 2021 46 Q 6 evidence session of 20 May 2021, Ministry of Housing, Communities and Local Government, Local authority financial reporting and external audit: Spring update, 19 May 2021, paragraph 77 47 Qq 6, 40 evidence session of 20 May 2021 48 Q 21 evidence session of 20 May 2021 49 Q 22 evidence session of 20 May 2021 50 Q 70 evidence session of 20 May 2021 51 Qq 25–27 evidence session of 20 May 2021 52 Q 23 evidence session of 20 May 2021 Local auditor reporting on local government in England 15 2 Stabilising the local authority audit market The crisis in the local authority audit market
Government Response Summary
The government has agreed that MHCLG's Secretary of State will send a specific Remit letter to ARGA and ARGA's annual report will include a distinct local audit section, alongside FRC interim arrangements, to ensure local government interests are reflected.
Government Response
Accepted
HM Government Accepted
The department’s summer consultation reflects further work MHCLG has already conducted with BEIS and FRC on governance and delivery. It has been agreed with BEIS that MHCLG’s Secretary of State will send a discrete Remit letter to ARGA and that ARGA’s annual report will have a standing, distinct local audit section – the government is consulting on the scope of this. This also outlines that FRC will establish interim arrangements from April 2022 to ensure a smooth and timely implementation. Finally, NAO has been liaising with FRC on the range of activities it conducts around the Code of Local Audit to assist with planning for the transfer of the Code to ARGA as system leader.
Addressee Bodies
HM Treasury
Timeline
Recommendation age 5.0 yrs
Report published 14 Jul 2021