The annual audit stopped being a compliance formality a while ago.

Since the Social Housing (Regulation) Act 2023 gave the Regulator of Social Housing (RSH) stronger powers, and with the RSH now running quarterly stability checks on top of annual judgements, sharper questions are landing earlier in the audit process than they used to. The RSH’s Regulatory Casework Review 2026 makes the point plainly: in one case, weak financial monitoring and thin board oversight let a liquidity problem build up unreported until the landlord had no option but to merge with a larger provider. That’s what happens when the areas below get reviewed once a year instead of continuously.

As auditors working with registered providers and public sector bodies across Merseyside and Greater Manchester – where rising build costs and tighter margins have squeezed development pipelines – these are the five areas we would recommend housing association finance teams review before fieldwork starts, and the ones we’d encourage any board or audit committee to have covered before they even get to that stage.

Most registered providers work to a 31 March year end, in line with the wider public funding calendar and the RSH’s own regulatory return timetable. That means a large share of the sector is tendering or confirming auditors at the same time each spring, with fieldwork clustering over the summer months as a result. If your association follows that pattern, engaging us early – rather than in the same window as everyone else – gives us more room to get under the skin of your accounts before the clock starts, particularly if you’re going out to tender rather than reappointing.

1. Fixed asset accounting

Housing associations typically hold the majority of their balance sheet in property, so this is rarely a light-touch area for us. Before we start fieldwork, we’ll want to see:

  • asset registers that reconcile to the current stock list and unit numbers;
  • depreciation policies and useful economic lives that still reflect how components actually behave, not just what was set at FRS 102 transition;
  • components – roofs, kitchens, bathrooms, heating systems, lifts – separately identified and depreciated on their own schedules;
  • major works correctly classified between capital improvement and repairs and maintenance, which has real profit and loss consequences if judged wrong; and
  • impairment reviews completed wherever schemes are underperforming, void rates have risen, or costs have overrun.

Building safety remediation costs add another layer here. Where cladding or fire safety work is being capitalised, componentised, or expensed, we’ll want that judgement documented and applied consistently year on year – the RSH increasingly expects the same.

2. Development schemes and work in progress

New development is where the accounting gets genuinely complex, because a single scheme can touch grant funding, shared ownership staircasing, viability assumptions, and multi-year cost allocation all at once. We typically test:

  • development costs capitalised in line with your accounting policy;
  • cost allocation across mixed-tenure schemes (social rent, affordable rent, shared ownership, market sale);
  • grant treatment, including Affordable Homes Programme funding and recycled capital grant fund obligations where relevant;
  • viability assessments – do original scheme appraisals still hold up against actual costs?
  • work in progress balances reconciled against certified spend; and
  • completed schemes correctly transferred out of WIP and into the fixed asset register.

Build cost inflation has eaten into scheme margins across the North West over the past couple of years, so viability assumptions that haven’t been refreshed since appraisal stage are one of the more common areas we query at the moment.

3. Rent arrears and bad debt provisions

Affordability pressure hasn’t gone away. The most recent English Housing Survey data shows 8% of social renters currently in arrears, with a further 6% having fallen behind at some point in the previous 12 months. Within the social sector, local authority tenants (17%) are more likely to be in arrears than housing association tenants (13%) – a gap that matters, because it means your provision methodology should be grounded in your own tenant base and payment history, not a generic sector assumption.

We’ll want to see, and be able to test:

  • the ageing profile of arrears and how it’s moved year on year;
  • the expected loss rate applied, and whether it’s still consistent with actual recovery experience;
  • assumptions about tenant payment behaviour, particularly where welfare reform or Universal Credit migration has affected a specific stock area; and
  • recovery rates achieved versus those assumed in the provision.

If the bad debt provision hasn’t moved much despite a shift in the arrears trend, that’s usually the first thing we’ll pull on.

4. Internal controls

This is where the RSH’s Governance and Financial Viability Standard and our own audit approach overlap almost entirely. The standard requires boards to manage the organisation with, in the regulator’s own words, “skill, independence, diligence, effectiveness, prudence and foresight” – and RSH casework has repeatedly found that risk management sits with the board, not just the executive team, when things go wrong.

We’ll be reviewing:

  • segregation of duties, particularly in smaller finance teams where the same person can raise and approve a payment;
  • authorisation procedures, and whether delegated authority limits are followed in practice, not just on paper;
  • supplier onboarding and ongoing due diligence, especially for contractors on development or remediation work;
  • bank reconciliations, completed and reviewed on a timely basis rather than caught up in a batch before year end;
  • payroll processes, including starters, leavers and manual adjustments; and
  • fraud prevention measures, including whether the risk register has actually been updated in the past twelve months.

5. Data quality and management information

Every one of the four areas above is only as good as the data behind it. Boards, the regulator and auditors are increasingly working from the same management information, and the RSH’s move to more frequent stability checks means finance data gets scrutinised well before year end, not just at audit.

We’ll expect the information going to the board, the regulator and us as auditors to be:

  • accurate and reconciled to the underlying accounting records, not a parallel spreadsheet;
  • consistent across audiences – the board pack, the regulatory return and the audit file should all tell the same story;
  • timely, so decisions and disclosures are made on current information rather than a stale quarter-end snapshot; and
  • supported by evidence that can actually be produced on request, rather than assumed to exist somewhere.

How does the new Housing SORP affect this year’s audit?

If your association hasn’t yet worked through the implications of Housing SORP 2026, particularly around service charge revenue recognition, this is the year it will show up in our audit queries – worth reading alongside the five areas above rather than treating it as a separate exercise.

Why instruct UHY Williamson Croft as your housing association auditor

A general practice audit team that treats a housing association like any other company audit will miss the issues that are specific to it – EUV-SH property valuations, RSH Accounting Direction disclosures, and Housing SORP treatment among them. Our audit and assurance team works across public sector and property clients throughout Liverpool and Manchester, and we bring that sector depth to registered providers directly, rather than treating housing association audit as an add-on to a generalist practice.

Conclusion

None of the five areas above is exotic. What’s changed is the standard boards and auditors are holding them to – sharper regulatory scrutiny, tighter development margins, and a tenant base under real financial pressure all mean less room for assumptions that haven’t been tested since last year. Associations that treat these reviews as a continuous discipline, rather than a pre-audit scramble, tend to have noticeably smoother audits – and fewer surprises in the management letter.

If you’re tendering or reappointing auditors for the year ahead, get in touch with our team — we’d welcome the conversation.