Thursday, 14 June 2012

Draft Public Audit (Wales) Bill

"Who watches the watchers?"
The draft Public Audit Bill aims to address some key issues
surrounding how public institutions in Wales are held to account.
(Pic: BBC)

The second "meaty" piece of legislation so far this Assembly term is incredibly boring, but absolutely essential. It's to do with the Wales Audit Office, which has – ironically - come under intense scrutiny over the years due to various failing and malpractices.

Before she became Plaid leader, Leanne Wood (Plaid, South Wales Central) uncovered instances of workplace bullying, self-authorised expenses and excessive severance packages. And of course the former Auditor General was jailed in November 2010.

Having said that, despite these major issues, it's actually been an efficient organisation – winning a chartered accountancy award in 2009.

The time has come though for more concrete changes and Finance Minister Jane Hutt (Lab, Vale of Glamorgan) put a new Public Audit Bill out for consultation in March, with a final draft/Bill proper likely to come in the next couple of months.

The draft proposals included:

1. Public Audit Institutions

The Auditor General:
  • Will be nominated by the Assembly and appointed by the Queen
  • Can hold the office for a single term of 7 years and cannot be re-appointed
  • Cannot be an elected official, member of the House of Lords, or an existing employee of the Wales Audit Office or Assembly Commission
  • Pay will be decided by the Assembly's Public Accounts Committee, but won't be performance based
  • Will be Chief Executive of the Wales Audit Office

The Wales Audit Office (WAO):
  • Will have a corporate body made up of 7 members - 5 of whom will be non-executive members appointed from outside the WAO, the Auditor General and one employee of the WAO.
  • May employ its own staff, but under the same conditions as employment to the Welsh Government
  • Is obliged to carry out its functions "efficiently and cost-effectively"
  • Must prepare a statement of expenses and income and prepare and annual plan for the financial year
  • Will have the power to borrow to meet temporary excesses
  • May charge fees for its duties and services, subject to Public Accounts Committee approval. Welsh Ministers will be able to draw up a "scale of fees" through regulations

2. Public Audit Functions
  • The Auditor General will have "compete discretion" and will not be under the direct control of the Assembly or Welsh Government.
  • Welsh Ministers and Assembly Commission must keep proper accounts and prepare a statement of those accounts for each financial year, submitted by November 30th in the following financial year.

Public Bodies subject to public audit include (with varying deadlines):
  • Public Service Obundsman
  • Older Persons Commissioner
  • Children's Commissioner
  • Welsh Language Commissioner
  • Local Government Boundary Association
  • Estyn (school inspector)
  • Forestry Commission
  • Countryside Council for Wales
  • General Teaching Council for Wales
  • HEFCW (HE funding)
  • National Library
  • National Museum
  • Welsh levy board
  • Welsh NHS body/bodies
  • Care Council for Wales
  • Wales Centre for Health
  • Sports Council for Wales
  • CADW

  • Education bodies, such as governing bodies, may be subject to audit on request.
  • Welsh Ministers may amend the list with consultation with the body/bodies affected.
  • The Auditor General will have four months to lay a copy of the accounts before the National Assembly as well as a report on any findings.
  • The Auditor General will have to be satisfied that spending, or money received, was lawful, used for expected purposes, meets statutory provisions for accounting and observed proper practices in the statement of accounts.
  • The Auditor General will have to carry out "value for money" examinations, to ensure efficiency and cost-effectiveness within an organisation. This must take the views of the Public Accounts Committee into account.
  • The Auditor General can produce reports on matters "in the public interest" that arise during an audit.
  • The House of Commons Select Committee of Public Accounts will be able to request that the Assembly's equivalent committee take evidence on their (HoC) behalf or report evidence to them.

3. Auditing Local Government
  • Local authorities (county councils, community councils, national parks, police commissioners, fire authorities etc.) will need to make up their accounts by March 31.
  • The Auditor General will have similar powers to audit local authorities as those listed in part 2 above.
  • The Auditor General will have the power to judge and publish "standards of performance" within local authorities. It will need to be published in a local newspaper which is printed for sale, free of charge or circulating in the area.

4. Data Matching
  • The Auditor General will be able to conduct "data matching exercises", which involves comparing data to see how well they match, including identifying patterns and trends. This aims to assist in the detection of fraud.
  • Any of the bodies mentioned above will be required to provide data to the Auditor General, with fines for non-compliance.
  • Results of data matching may be disclosed by the Auditor General but with some restrictions (i.e. patient data).
  • The results may be published by the Auditor General, but not if the body or person is included in the data matching exercise, can be identified from the information, or if the information is "not otherwise in the public domain".
  • The Secretary of State will have powers in this area to do with criminal justice. The SoS will have powers to amend the Act to include public bodies that relate exclusively to Wales, modify applications or to omit bodies.

5. Functions of the Auditor General

This is a list of specific rights and duties of the Auditor General, and the subjects of audits. It's an expansion of everything listed above.


I'm not entirely sure of the reasons this legislation is needed, to be frank. All of these things should already have been in place since the Wales Audit Office was established. However, it does make it a lot clearer as to what the Wales Audit Office and the Auditor General are responsible for. It should lead to better functioning behind the scenes, and ensure that relevant bodies are kept on their toes.

It brings the Wales Audit Office into line with the provisions of the UK Budget Responsibility and National Audit Bill.

As I said, this is incredibly boring an uninspiring, but essential for smooth running of government.

You can wake up now.


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