The current code is due an update – having come into force in April 2015 it has a five year lifespan and it needs to be reviewed in preparation for a new code which must be presented to Parliament no later than 1 April 2020.
The consultation document said: “Auditors need to be able to respond to the challenges that face local public bodies. In recent years, this has been characterised by increasing financial pressures in all sectors and increasing demand for services is challenging both financial and service sustainability.”
It also said it would cover five particular concerns which were; financial sustainability of local authorities 2018; financial sustainability of police forces in England and Wales 2018; NHS financial sustainability; local authority governance; and local auditor reporting in England 2018.
The document added that the NAO had received “strong representation” from finance directors that local auditors “focus too much on certain figures in the accounts, such as asset and pension liability” which does not directly impact on the organisation’s ability to deliver services or the council tax that local authorities need to charge.
The body said independent external auditors had a key role in “supporting effective stewardship, governance and accountability” and said it would be “helpful” for the code to set out clearer expectations of auditors when their powers might be used and when applying the principle of proportionality, particularly at smaller authorities.
The deadline to submit evidence will be 1 May 2019.