The National Audit Office (NAO) has published a new draft Code of Audit Practice (the Code) for 2024, setting out how auditors of public bodies such as councils, police and the NHS meet statutory responsibilities under the Local Audit and Accountability Act 2014.

The Code will come into effect in the autumn, pending Parliamentary approval. It will apply to audits that have not been certified complete at the time it comes into effect, and to the audits of local bodies from 2024-25, until it is replaced after five years.

The proposed Code is designed to support the work of the Ministry for Housing, Communities and Local Government (MHCLG) to clear the growing local audit backlog. With local public bodies responsible for delivering many critical public services, from special educational needs to bin collection, the considerable spend involved requires assurance that these bodies have proper arrangements in place to manage their business and finances. 

Stakeholders across the local audit system, including the NAO, have been working on proposals to clear the backlog and return the local audit market to a sustainable footing.

Proposals for the draft Code were submitted for consultation in February/March 2024; NAO published a consultation response along with the draft Code, setting out the major changes to the Code and summarising the feedback received during the consultation.

The proposed amendments primarily give effect to measures aimed at clearing the backlog and helping make reporting of work on value for money more timely. MHCLG has laid a Statutory Instrument before Parliament to introduce statutory deadlines for the publication of audited accounts.

Gareth Davies, head of the NAO, said: “The new Code will support the return to timely and effective local audit. Alongside other measures, including the introduction of statutory deadlines for the publication of audited account, the new Code aims to restore public confidence and put local audit on a more sustainable path.”

Alison Ring, Director, Public Sector and Taxation, says: "The revised Code of Practice supports the reset of the local audit system. It is important for all stakeholders to work together to recover the system and address the underlying symptoms that led to the audit delays and implement longer-term reforms to ensure a backlog doesn’t build up again."