Wiltshire & Swindon Training Partnership (SLCC & WALC)

Clerks Forum / Training Day

Accounts and Audit Regulations 2003

“Changes”

Friday 10 February 2006

Alan Fairchild

External Affairs Officer

Society of Local Council Clerks

Headlines

Audit regime declared ‘fit for purpose’ and will stay

No increase for majority of councils for next five years

‘No fee’ band extended

Two new income bands

Thresholds for basic and intermediate audit doubled

Overall rise in fees is 5%

Proposals for change to fee bandings

Increase the ‘no fee’ banding from £0 - £500 to £0 - £1,000

No change to the £50 fee banding from £1,001 - £5,000

Introduce a new band fee from £5,001 - £10,000

Introduce a new band fee from £10,001 - £25,000

Proposals for change to thresholds

Increase the upper threshold for the ‘basic’ audit from £100,000 to £200,000

Increase the upper threshold for the ‘intermediate’ audit from £500,000 to £1million and introduce two new fee bands at £500,000 - £750,000 and £750,001 - £1million

Recommend changes to accounting requirements in A & A Regulations to harmonise with new audit limits

Basic Audits

Band in £ turnover

0-0.5k

0.5k – 1k

1k – 5k

5k – 10k

10k – 25k

25k – 50k

50k – 100k

100k – 200k

Old total fee

0

45

50

120

120

250

350

650

New total fee

0

0

50

120

135

285

400

550

Intermediate Audits

Band in £ turnover

200k – 300k

300k – 400k

400k – 500k

500k – 750k

750k – 1,000k

Old total fee

750

900

1,250

N/A

N/A

New total fee

875

1,050

1,450

1,950

2,500

Audit Fee Scale 2006-2011 (1)

Income/expenditure band (£)

(Fees payable on whichever is higher)

Type of audit

Fixed audit fee (£)

Commission fee (£)

Total fee charged to local council (£)

Change from current fee (%)

0 – 1,000 Basic No fee

payable

No fee

payable

No fee payable

Nil

1,001 – 5,000 Basic 50 No fee

payable

50 Nil

5,001 – 10,000 Basic 110 10 120 Nil

10,0001 – 25,000 Basic 125 10 135 12.5

25,001 – 50,000 Basic 260 25 285 14.0

50,001 – 100,000 Basic 370 30 400 14.3

100,001 – 200,000 Basic 500 50 550 15.4

Audit Fee Scale 2006-2011 (2)

Income/expenditure band (£)

(Fees payable on whichever is higher)

Type of audit

Fixed audit fee (£)

Commission fee (£)

Total fee charged to local council (£)

Change from current fee (%)

200,001 – 300,000 Intermediate 800 75 875 16.7

300,001 – 400,000 Intermediate 960 90 1,050 16.7

400,001 – 500,000 Intermediate 1,310 140 1,450 16.0

500,001 – 750,000 Intermediate 1,775 175 1,950 *

750,001 – 1 million Intermediate 2,275 225 2,500 *

The SORP “Hokey Cokey!”

Band B councils with expenditure over £500,000 and under £1million for the second year at 31.3.2006 need do nothing further in connection with SORP accounting

Band B councils over £500,000 and under £1million for the third year at 31.3.2006 will not be required to prepare year end accounts in accordance with the SORP

Existing councils already complying with the SORP whose expenditure is under £1million at 31.3.2006 AND FOR THE PREVIOUS TWO FINANCIAL YEARS will report using the Annual Return for 2005/2006

For Band B councils approaching the new SORP accounting threshold of £1 million the same “three year in – three year out” rule applies

For the 41 Best Value councils – no change at present but watch this space!