To consider the Executive Head of Finance Report No. FIN1824 (copy attached), which proposes the procurement of an external auditor for the Housing Benefit Subsidy claim for 2018/19.

The Committee considered the Executive Head of Finance’s Report No. FIN1824, which provided an update on the process undertaken to procure external audit services for the Council’s Housing Benefit Subsidy claim for the year 2018/19. 

Following the demise of the Audit Commission, new arrangements had been put in place for the appointment of external auditors.  The Council had opted in to the appointing person regime, allowing Public Sector Audit Appointments Limited to carry out a sector-wide procurement exercise.  These arrangements, however, only covered the core audit work in relation to the annual statement of accounts and the Council’s arrangements to secure economy, efficiency and effectiveness in its use of resources.  The Council was required to make its own arrangements for the audit of the Housing Benefit Subsidy Claim in line with the requirements of the Department of Work and Pensions.   In the absence of a sector-wide procurement option, Chief Finance Officers across Hampshire and the Isle of Wight had considered a collaborative approach in order to maximise benefit from the procurement process.  Following a tendering exercise, KPMG had been identified as the preferred supplier.  The Committee was advised that the fixed price for authorities without a Housing Revenue Account, such as Rushmoor, was £7,995 with additional work charged at £71 per hour.  A variant bid had also been stated, which allowed authorities to choose to undertake initial sampling in-house.  The fixed price for this was £3,995.  The planned fee for housing benefit subsidy assurance for Rushmoor for 2017/18 was £8,652 under the existing arrangements with Ernst & Young LLP. 

Members were advised that, whilst the exercise had resulted in a marginal saving for Rushmoor, it was important to demonstrate that the Council had followed due process in the procurement of auditors for the Housing Benefit Subsidy claim, given the significant figures involved in the subsidy (approximately £39 million) and the potential loss of subsidy if the Council was found not to be administering its Housing Benefit claims correctly, including  the consequential effect on residents. 

RESOLVED:  That the approach outlined in the Executive Head of Finance’s Report No. FIN1824 for the appointment of external auditors for the Housing Benefit Subsidy claim be endorsed.