SMALL accounting firms are missing out because of the way contracts were awarded for parish council work, a leading organisation has claimed.

The Association of Chartered Certified Accountants (ACCA) has criticised the way in which the Government distributed the task of auditing parish council and parish meeting accounts.

Many small parishes, such as Lastingham Parish Meeting, on the North York Moors, have been left with auditing fees costing half their annual income.

Some rural councils now have no cash left in their coffers because they cannot afford the set rates, which start at £52 for an annual audit.

Accountant Peter Brown contacted The Evening Press after he heard of Lastingham's plight.

He said: "I have spoken to my professional body, the ACCA, and it is hopping mad about it.

"I rang the Audit Commission and the story that is emerging is absolutely unbelievable.

"The applications all came from big companies because they are the ones who get the list of Government contracts being offered."

He said: "It's horses for courses - if you are doing a very small job then the big firms are not very geared up to do them, just like I would not be geared up to do ICI.

"They have not advertised in the place where the appropriate people could have seen it."

York solicitor Jonathan Beckerlegge, ACCA spokesman for the North-East, said: "The audit services of many small accountancy firms are being overlooked by parish councils, which is to the detriment of both parties.

"Small accountancy firms are missing out on valuable business and the parish councils are, at times, failing to benefit from the cost benefits and local knowledge and perspective which smaller accountancy firms can bring to the audit process."

But a spokeswoman for the office of the Deputy Prime Minister said the Audit Commission had followed procedure when it awarded the contracts.

"The EC procurement threshold for public sector services applications at the time required the Audit Commission to place a notice in the European Journal, so any firm irrespective of size can respond," she said.

"The Commission also placed an advert in Government Opportunities, a trade publication for those interested in tendering for Government work."

Parish councils would still have been left with the fee system, she said, regardless of which firm of auditors had been drafted in.

The Audit Commission recently changed the way that fees are collected from an hourly rate to a flat fee.

She said: "The local councils' representative bodies and the Audit Commission will consider the impact of the changes following the first year of its operation."

Updated: 11:03 Monday, January 13, 2003