Citation, commencement and interpretation

1. —(1) This Order may be cited as the Local Audit (Delegation of Functions) and Statutory Audit (Delegation of Functions) Order 2014, and comes into force at the end of the period of 21 days beginning with the day on which it is made.

(2) In this Order—

“the Act” means the Companies Act 2006;

“the designated body” means the Financial Reporting Council Limited;

“local audit” has the same meaning as in paragraph 1(2) of Schedule 5 to the Local Audit and Accountability Act 2014( 3 ).

(3) Any reference in this Order to a provision of the Act is to that provision as it has effect in relation to local audit by virtue of Schedule 5 to the Local Audit and Accountability Act 2014.

Exercise of functions by the designated body

2. —(1) The designated body is designated for the purpose of enabling it to exercise functions of the Secretary of State under Part 42 of the Act as it applies in relation to local audits.

(2) The functions listed in paragraph (3) are not transferred by this Order.

(3) The functions referred to in paragraph (2) are—

(a) the function of making regulations under section 1214(5);

(b) the functions under—

(i) section 1224ZA( 4 );

(ii) section 1261(3);

(iii) section 1263;

(iv) Schedule 10, paragraph 13(10)(a); and

(c) the function of making regulations under section 1219(2).

(4) The functions listed in paragraph (5) remain exercisable concurrently with the Secretary of State.

(5) The functions referred to in paragraph (4) are the functions under—

(a) section 1224;

(b) section 1239(8);

(c) section 1254.

Freedom of information

3. This Order has the effect of making the designated body designated under section 5 of the Freedom of Information Act 2000( 5 ) (further power to designate public authorities) to the extent that it is exercising functions transferred or conferred by this Order.

Consultation requirements

4. —(1) Before the designated body makes any regulations in exercise of the functions transferred to it by this Order it must—

(a) publish the proposed regulations in such manner as appears to the body to be best calculated to bring the regulations to the attention of persons who may be affected by them;

(b) publish at the same time a statement that representations in respect of the proposals may be made to the body within a specified period (which must not be less than 4 weeks following the date of publication of the proposed regulations); and

(c) have regard to any representations duly made in accordance with the statement before making the regulations.

(2) Before the designated body gives a direction in exercise of the function in paragraph 13(10)(b) of Schedule 10 to the Act transferred to it by this Order it must—

(a) consult such relevant authorities as appear to it to be appropriate;

(b) inform such relevant authorities that they may make representations to the body within a specified period (which must not be less than 4 weeks beginning with the date on which consultation begins); and

(c) have regard to any representations duly made before giving the direction.

(3) The designated body must provide a relevant authority specified in, or of a description specified in, the direction with its reasons for giving the direction to the authority or to the description of authorities.

(4) A requirement imposed by paragraph (1), (2) or (3) does not apply in any case in which the designated body considers that the delay involved in complying with that paragraph would be prejudicial to the public interest.

Annual work programme

5. The designated body must publish a work programme in relation to the functions transferred by this Order at least once in every calendar year.

Requirements for recording decisions

6. The designated body must have satisfactory arrangements for—

(a) recording decisions made in the exercise of the functions transferred by this Order; and

(b) the safekeeping of the records of those decisions.

Matters notified to the designated body

7. —(1) If under section 1223(1) of the Act the designated body requires notification or the provision of information, it must notify the Secretary of State of the requirement without undue delay.

(2) If the Secretary of State so requests, the designated body must send the Secretary of State a copy of any notification or information received pursuant to the requirement.

Payment of amounts of financial penalties (less costs) by designated body to Secretary of State

8. —(1) The designated body must, subject to paragraph (2), pay the amount of a financial penalty under section 1225D of the Act( 6 ) to the Secretary of State as soon as reasonably practicable after it is paid to the body.

(2) The designated body may deduct and retain from the amount of any financial penalty a sum in respect of its reasonable costs incurred in relation to the imposition of that penalty up to the time of the giving of the relevant notice under section 1225E(5) of the Act.

(3) The costs of the designated body referred to in paragraph (2) are—

(a) its administrative costs (including any administrative costs incurred in determining that the requirement or obligation in respect of which the financial penalty was imposed had not been complied with);

(b) its costs of obtaining legal advice (including any legal advice in connection with determining that the requirement or obligation in respect of which the financial penalty was imposed had not been complied with);

(c) any other costs incurred in determining that the requirement or obligation in respect of which the financial penalty was imposed had not been complied with.

Time limits for prosecution of offences

9. Section 1256(1) and (6) of the Act has effect as if the references to the Secretary of State were references to the Secretary of State or the designated body.

Amendment of the Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc ) Order 2012

10. In article 9(1)(b) of the Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc) Order 2012( 7 ), for “12 weeks” substitute “4 weeks”.