Wandsworth Council's Audit Committee convened on Thursday, July 30, 2026, to scrutinise the council's financial accounts and external audit for the 2025-26 financial year. The meeting, detailed in the Public reports pack, addressed significant concerns regarding audit fees and the process of auditor appointment.
Audit Fees and Auditor Choice Under Scrutiny
A substantial increase in audit fees for the 2025-26 financial year was a focal point. The scale fee set by Public Sector Audit Appointments (PSAA) for this period is £363,148, a 320% rise from the 2021/22 scale fee of £86,559. External auditors, Ernst & Young (EY), indicated that they expect to charge additional fees on top of this significant increase. 
EY attributed the fee hike to national trends and increased audit requirements.
Specifically, they explained that when PSAA reset the five-year fee, they looked at the requirements of audit, which had changed significantly since the last five-year period.
Furthermore, changes to accounting standards have significantly increased
the demands on auditors and staff.
Catherine Burstyn, Director of Financial Management, explained that the council opted in to a procurement process managed by Public Sector Audit Appointments (PSAA), which appointed EY for a five-year period.
PSAA is an independent body responsible for setting audit fees for local councils and awarding auditors. The committee raised concerns about the perceived lack of auditor choice within this system.
EY clarified that the materiality threshold used in their assessments was set at 50% as a reflection of the prior year errors and also the fact that there was a disclaimed opinion issued in the prior year.
They further explained that disclaimed opinions in previous years (2022/23, 2023/24, and 2024/25) were due to national audit backlogs and the Government's 'backstop' deadlines, which limited the amount of audit work that could be completed – not because of issues with the Council's financial management.
The original disclaimer in 2022/23 also impacted subsequent years, as auditors could not fully rely on the previous year's opening balances.
The committee noted the progress on the 2024-25 and 2025-26 accounts. The council is aiming to complete the 2025-26 audit by the end of December 2026, which is one month ahead of the statutory deadline of January 31, 2027. This accelerated timeline is seen as crucial for the council to meet future deadlines and work towards an unqualified audit opinion. 
EY confirmed that all uncorrected misstatements exceeding £1.07 million would be reported. The committee reviewed the agenda for the meeting, available at Agenda frontsheet.
