The Audit Commission has awarded several
five-year government body audit contracts worth over £425m ($672m)
to Grant Thornton UK, KPMG UK , Ernst & Young UK and to DA
Partnership alliance with Mazars.
Grant Thornton received the highest share of
the work by winning contracts worth £41m a year mainly auditing
local authorities and the National Health Service.
KPMG UK was awarded contracts worth £23.1m a
year, Ernst & Young UK £20m and DA Partnership in alliance with
The Audit Commission said the outsourced contracts represent 70% of
audits previously carried out by the soon to be abolished body.
The other 30% of the Audit Commission’s work
is already outsourced to Deloitte, Grant Thornton, KPMG UK, PwC UK
and PKF UK.
The Audit Commission said it expects to reduce
costs by 40%, as a result of outsourcing and other savings.
Audit Commission chief executive Eugene
Sullivan said the procurement process has been a complex process
delivered to a very challenging timetable.
“But we should also acknowledge that this is a pivotal point in the
history of public service. We will be losing a distinctive and
publicly-owned, local public audit service and its District
Auditors who have helped to protect the public purse effectively
for over a hundred and fifty years,” she said.
The Audit Commission chairman Michael
O’Higgins, said the procurement has been the result of a rigorous
assessment of each bidder against published cost and quality
criteria, and will mean significant audit fee savings for local
councils, NHS trusts and other local bodies.
As a result of the dissolving of the Audit
Commission 700 auditors will have to transfer to the private
sector and the only tender DA Partnership includes former auditors
of the body in alliance with Mazars.
DA Partnership and Mazars said in a statement
that their excitement over the awarded contracts is tinged with
disappointment as it was only awarded contracts in the North East
and North Yorkshire.
“This means that we have insufficient work to
launch as an employee-owned independent firm. Instead, DA
Partnership becomes a wholly-owned subsidiary of Mazars and will
trade as Mazars DA,” they said.
The Audit Commission said that following the
end of the procurement process, there will be a consultation period
with audited bodies on the appointment of their new auditors. The
appointments will be formally approved by the Commission’s Board in