ARGA confirmed as local audit system leader

by Mike Thatcher
in 151 News · Audit · Technical
— 31 May, 2022

The government has confirmed plans to establish a new regulator, the Audit Reporting and Governance Authority (ARGA), as the “system leader” in local audit.

Local audit requires a leadership body to help the system operate effectively – something that is particularly important given the audit delays currently being experienced in England. The Department for Levelling Up, Housing and Communities (DLUHC) has been acting as interim system leader since July 2021.

Ahead of ARGA’s establishment as a replacement for the Financial Reporting Council (FRC), DLUHC said that a shadow system leader arrangement would start at the FRC from September 2022. Neil Harris, currently an EY audit partner, is to join the FRC as its first director of local audit tasked with setting up a dedicated local audit unit.

Local government minister Kemi Badenoch said: “A robust system of local audit is key to maintaining public confidence in local government through assuring transparency and accountability.”

CIPFA said that it welcomed the confirmation of ARGA’s role. “A strong system leader that’s focused on the needs of local audit is essential to push through the much-needed changes,” said Rob Whiteman, CIPFA CEO.

Whiteman added that the institute still had concerns over the delays in the publication of audited financial statements. “These delays have a substantial impact on staff resources, which in turn affects policy delivery – including the government’s levelling up agenda.”

The government also confirmed that audit committees will be compulsory for all English councils – with each audit committee required to include at least one independent member.

“We believe that an effective audit committee is essential for good governance arrangements – so this is good news,” said Whiteman.