Fee scales and fee setting
The Auditor General for Wales reviews and sets scales of fees for the audit of local government bodies annually.
Fee scales provide a framework within which auditors can discuss fees with local government bodies. Fee scales also enable the Auditor General to identify and challenge fees that appear to be either too high or too low to enable auditors to properly discharge their responsibilities. When prescribing fee scales, the Auditor General aims to ensure that the fees subsequently generated are sufficient to enable the Wales Audit Office to maintain financial balance in its local government work.
The fee scales are benchmarked against fees charged by other UK audit agencies, where appropriate.
The Auditor General has published his Fee Scheme 2020-21.
Auditors are required to use their professional judgment, informed by the Auditor General’s Code of Audit Practice, relevant accounting and auditing standards, and guidance issued by the Auditor General to determine where a particular audited body lies on the prescribed fee scale for that type of body.
Where proposed fees fall outside of the prescribed fee scale or have changed by more than +/- 5% year-on-year the Auditor General will review the proposed fees to ensure that they are adequately explained by relevant circumstances or are amended accordingly. This will constrain the potential for excessive or inadequate fees to arise. Following the application of these controls the fee will be discussed with the relevant audited body and, subject to any further information arising that affects the work to be done, will be confirmed as the fee to be charged to that body.
- Annual audit work includes work undertaken in relation to the audit of accounts alongside, where applicable, improvement audit and assessment work carried out under the Local Government (Wales) Measure 2009.
- Annual audit work fee scales do not include work that goes beyond the general duties of auditors, such as reporting in the public interest, extraordinary audit, special inspections and work in relation to elector challenge and the prevention of unlawful expenditure. Such additional work is charged on a day basis.
- Separate fee rates also apply to work undertaken to certify claims and returns in respect of grants paid or subsidies made to local government service bodies.
- Audited body risks and other factors such as its political demands, financial reporting framework and business decisions may, in the auditor's judgement, have a bearing on the amount of audit work necessary to allow the proper discharge of the auditor's responsibilities.
- The impact of the controls and arrangements that the audited body has put in place to achieve its objectives and in doing so to manage and mitigate the effects of complexity, risks and other factors can also have a bearing on the auditor's ability to properly discharge their responsibilities.