Welsh Affairs Committee Report on Draft Public Audit Wale.
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House of Commons Welsh Affairs Committee Draft Public Audit (Wales) Bill Fifth Report of Session 2002–03 HC 763 House of Commons Welsh Affairs Committee Draft Public Audit (Wales) Bill Fifth Report of Session 2002-03 Report, together with formal minutes, oral and written evidence Ordered by The House of Commons to be printed 2 July 2003 HC 763 Published on 10 July 2003 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Welsh Affairs Committee The Welsh Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations with the National Assembly for Wales.) Current membership Mr Martyn Jones MP (Labour, Clwyd South) (Chairman) Mr Martin Caton MP (Labour, Gower) Mr Huw Edwards MP (Labour, Monmouth) Dr Hywel Francis MP (Labour, Aberavon) Ms Julie Morgan MP (Labour, Cardiff North) Mr Albert Owen MP (Labour, Ynys Môn) Mr Adam Price MP (Plaid Cymru, Carmarthen East and Dinefwr) Mr Mark Prisk MP (Conservative, Hertford and Stortford) Mr Bill Wiggin MP (Conservative, Lemonister) Mrs Betty Williams MP (Labour, Conwy) Mr Roger Williams MP (Liberal Democrat, Brecon and Radnorshire) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on ...
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House of Commons
Welsh Affairs Committee
Draft Public Audit (Wales) Bill
Fifth Report of Session 2002–03
HC 763
House of Commons Welsh Affairs Committee
Draft Public Audit (Wales) Bill
Fifth Report of Session 2002-03
Report, together with formal minutes, oral and written evidence
Ordered by The House of Commons to be printed 2 July 2003
HC 763 Published on 10 July 2003 by authority of the House of Commons London: The Stationery Office Limited £0.00
The Welsh Affairs Committee The Welsh Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations wi th the National Assembly for Wales.) Current membership Mr Martyn Jones MP (Labour, Clwyd South) (Chairman) Mr Martin Caton MP (Labour, Gower) Mr Huw Edwards MP (Labour, Monmouth) Dr Hywel Francis MP (Labour, Aberavon) Ms Julie Morgan MP (Labour, Cardiff North) Mr Albert Owen MP (Labour, Ynys Môn) Mr Adam Price MP (Plaid Cymru, Carmarthen East and Dinefwr) Mr Mark Prisk MP (Conservative, Hertford and Stortford) Mr Bill Wiggin MP (Conservative, Lemonister) Mrs Betty Williams MP (Labour, Conwy) Mr Roger Williams MP (Liberal Democrat, Brecon and Radnorshire) Powers The committee is one of the department al select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the In ternet via www.parliament.uk. Publications The Reports and evidence of the Commi ttee are published by The Stationery Office by Order of the House. All public ations of the Committee (including press notices) are on the Internet atwww.parliament.uk/parlia mentary committees/welsh affairs committee.cfm. _ _ _ A list of Reports of the Committee in the pres ent Parliament is at the back of this volume. Committee staff The current staff of the Committee ar e James Davies (Clerk), Paul Derrett (Committee Assistant) and Sara h Colebrook (Secretary). Contacts All correspondence should be addressed to the Clerk of the Welsh Affairs Committee, House of Commons, 7 Mill bank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3264; the Committee’s email address is welshcom@parliament.uk
Draft Public Audit (Wales) Bill1
Contents Report Summary 1 Introduction Publication of draft Bill Our inquiry 2 General Scope of Bill Auditor General for Wales Audit Commission in Wales Effects of Bill Process of legislation 3 The creation of a single audit body for Wales Auditor General: functions and powers 4 Safeguarding the democratic accountability of local government Background Advisory Body 5 The audit process, co-operation and joint working Background Minimising the inspection burden on audited bodies Joint reports A role for the private sector 6 Transparency and consistency across the audit process Disclosure of information Audit access rights Status quo 7 Changes in the audit arrangements for NHS bodies Health audit 8 Staffing and Resources Challenges Costs Organisation of new Office Conclusions and recommendations Formal minutes
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2 Draft Public Audit (Wales) Bill
Witnesses
List of written evidence
Reports from the Welsh Affairs Committee since 2001
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Summary
Draft Public Audit (Wales) Bill3
The Draft Public Audit (Wales) Bill is the second draft Wales-only Bill the Committee has examined. The Committee shares the general welcome extended to the main purpose of the draft Bill to create a new Wa les Audit Office under the Auditor General for Wales, to embrace local government and NHS bodies as well as the National Assembly for Wales and its sponsored bodies. The Committee makes several re commendations designed to increase transparency and accountability, including • Auditor General to have theconsideration of a wide stat duty to be placed on utory regard to the views of all appr opriate professionals and rele vant stakeholders on his forward programme for local governme nt value for money audit (para 26) • unduly restricts disclosuredeletion of Clause 50 which of information by local government auditors (para 35) • of the rights given by Clause 11 of the Bill to the auditorsextension to local government Auditor General to follow public money to the end user,“making Welsh audit a beacon of good audit practice” (para 37) The Committee expresses disappointment that the opportunit y has not been taken to make the new arrangements for Welsh local government and NHS audit better than elsewhere in the United Kingdom rather than no worse (par a 38): and some concern at the vagueness of the costs of the proposed establishment of the Wales Audit Office (para 42). The Committee also calls for a duty on the Auditor General to promote cross-border studies, and their publication as joint report s (paras 29–31) and seeks clarification of several issues, including NHS performance audit arrangements , (para 40), arrangements between the Auditor General and the Assembly (para 44), and the proposed extension of the Auditor General’s powers (para 16).
1 Introduction
Draft Public Audit (Wales) Bill5
Publication of draft Bill 1. published the draft Public Audit (Wales) Bill and Wales The Secretary of State for accompanying explanatory no tes on Thursday 3 April 2003.1 consultation period The expired on 27 June. The draft Bill aims to consolidate the audit arrangements for public bodies in Wales, in a similar way to recent restructuring in Scotland and Northern Ireland. Our inquiry 2. practice for departmental Select Committees at Westminster toIt is now standard examine and report on draft legislation. They do this by seeking the views of stakeholders through oral evidence, and th rough examination of written memoranda, drawing where possible on responses to the relevant department’s public consultation process. We have followed this procedure, adapted as necessar y to take account of the involvement of the National Assembly for Wales. We understand th at the National Assembly has set up an ad hoc Committee to examine and re port on the draft Bill. This is the second time this Committee has conducted pre-le gislative scrutiny of a draft Bill for Wales, following our examination in May and June 20 02 of the draft NHS (Wales) Bill.2 3. its intention to conduct an inquiry of Following an announcement by the Committee into the Bill, we received written submissions from, among others, the Auditor General for Wales, the Audit Commission and the Wels h Local Government Association. We held three oral evidence sessions in June. The firs t was held at the National Assembly for Wales (NAW) in Cardiff when we took evidence from the Welsh Local Government Association; Professor Talbot, Professor of Public Policy and Management , University of Glamorgan; and Sue Essex, Assembly Minister for Finance, Local Go vernment and Public Services. Our other sessions were held at Westminster when we took e vidence from the Auditor General for Wales and the Audit Commission; and from Don To uhig MP, the Parliamentary Under-Secretary of State for the Wales Office. We are most grateful to all who gave evidence, and in particular to those who provided us with written memoranda to a tight deadline. The Committee also acknowledges the very considerable assistance received from the recently established Scrutiny Unit within the Committee Office. 2 General Scope of Bill 4. nsolidationThe main focus of the draft Bill is on the co of the audit arrangements for public bodies within Wales. Currently the audit and review of the National Assembly for Wales and its sponsored bodies is undertaken by the Auditor General for Wales, whilst
1 Draft Public Audit (Wales) Bill, Cm 5796 2 Third Report of Session 2001–02,The draft NHS (Wales) Bill, HC 959: Government response published as Fifth Special Report, HC 1215 of Session 2001–02
6 Draft Public Audit (Wales) Bill
responsibility for the audit and review of Welsh local government bodies rests with the Audit Commission for England and Wales.
Auditor General for Wales 5. The office of Auditor General for Wales was cr eated by Section 90 of the Government of Wales Act 1998. The Auditor General is appointed by Her Majesty and paid by the Assembly. The Assembly’s Audit Committee fulfils a dual role of receiving and publishing his reports and following up their conclusions, and overseeing the expenditure of his office. The current UK Comptroller and Auditor Gener al, Sir John Bourn, was appointed in June 1999 as the Auditor General fo r Wales; but there is no reason why this should be a permanent arrangement, as the memo randum from Sir John observed.3 Although completely independent of the Assembly and its Audit Commit tee, the Auditor General is obliged under statute to “take into account the views of the Audit Committee” as to the examinations he carries out on economy, efficiency and effective ness of public bodies, and he has “a very close working rela tionship” with the Audit Committee4 . 6. The Auditor General currently • audits and certifies the accounts of the Assembly and its sponsored bodies; anyreports to the Assembly onof importance which arise from the audit of matters • accounts; • which look at whether resources have been vestigations undertakes value for money in used economically, efficiently and effectively; • has rights on, the accounts of NHS bodies and semblyto inspect, and report to the As further and higher education in stitutions, although he is not primary auditor of those bodies. We understand that there are around 50 Na tional Audit Office staff who support the Auditor General for Wales, based in Cardiff.
Audit Commission in Wales 7. The Audit Commission for England and Wales was established in 1983, to oversee local government financial audit. Over recent years it has taken on responsibility for performance audit, including Best Value inspections of lo cal authorities, Comprehensive Performance Assessments of local authorities and broad studies across a number of authorities. The Commission is a body corporate of up to 20 members, appointed by Ministers, comprising those with expertise in local government, the NHS, academic disciplines and the accountancy profession. It is largely funded from fees charged to those it audits. It has a staff of around 2,300, including 1, 500 in the Commission’s audit agency, District Audit, and 450 in inspection, reporting to a Chief Executive known as the Controller of Audit. 3 Ev20, para 3 4 Qq 93,111 and Ev20, para 6
Draft Public Audit (Wales) Bill7
8. The Audit Commission in Wales is a recently established semi-independent office of the Audit Commission, with its own Director Gen eral. It has around 180 staff, with its headquarters in Cardiff and regional offi ces in Carmarthen and Deeside. The Audit Commission in Wales • toappoints external auditors and local government bodies NHS bodies in Wales; • withensures that appointed auditors comply the Code of Audit Practice; • carries out inspection of lo cal government, including Best Value inspections of local authorities’ best value performance plans and performance, known in Wales as the “Programme for Improvement”, and joint inspections of So cial Services with the Social Services Inspectorate for Wales and of education authorities with Estyn. Effects of Bill 9. functionsThe draft Bill proposes to bring together the of the Auditor General in Wales and most of the functions of the Audit Commission in Wales into a single audit body to be known as the “Wales Audit Office” or “y Swyddfa Archw ilio Cymru”. The Auditor General for Wales would head the new body, which wou ld be responsible for the financial audit and value for money audit of: • Assembly for Wales and its sponsored bodies;The National • Health bodies in Wales, pr imarily the NHS Trusts and Local Health Boards; and • Local government bodies in Wales. The length of the bill (70 clauses) is due to th e fact that it mirrors much of the Audit Commission Act 1998. Welsh legislation which aloneWe welcome this almost stand does not require significant cross-referenc e to other Acts of the UK Parliament. Process of legislation 10. Mr Touhig confirmed to us that he anticipated that the Bill would follow the pattern of the Health (Wales) Bill last year.5We have therefore ensured that this Report is ready for the debate on the draft Bill in the Welsh Grand Committee, to be held in mid-July. With the commencement of the Par liamentary recess consideration will be given by Welsh and UK ministers to all the comments, and amendm ents made as appropriate, so that in October 2003 the Bill can be offered to the Legislative Programme Committee of the Cabinet ready to be presented as early as possible in the new session. It would then follow the standard legislative process in Westminster.
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