SCHEDULE 2 continued PART 2 continued
Budget Responsibility and National Audit BillPage 20
7
(1)
The Public Accounts Commission may determine other terms for an
appointment under this Part of this Schedule.
(2) These terms may include restrictions on—
(a)
5the offices or positions (including offices and positions to which
persons may be appointed, or recommended for appointment, by or
on behalf of the Crown) that the non-executive member may hold
while, or after ceasing to be, a member, and
(b)
the agreements or other arrangements (including agreements and
10arrangements with the Crown or bodies or other persons acting on
behalf of the Crown) to which the non-executive member may be a
party while, or after ceasing to be, a member.
8
Before making any arrangements under paragraph 6 or a determination
15under paragraph 7, the Commission must consult any person with oversight
of public appointments whom the Commission thinks it is appropriate to
consult.
9
(1)
The person who chairs NAO may resign by giving written notice to the
20Prime Minister.
(2)
Any other non-executive member may resign by giving written notice to the
Public Accounts Commission.
10
(1)
Her Majesty may terminate the appointment of the person who chairs NAO
on an address of both Houses of Parliament.
(2)
25The Public Accounts Commission may terminate the appointment of any
other non-executive member by giving the member written notice if—
(a)
the member has been absent from meetings of NAO without NAO’s
permission for a period of more than 3 months,
(b)
the member has become bankrupt or has made an arrangement with
30creditors,
(c)
the member’s estate has been sequestrated in Scotland or the
member has entered into a debt arrangement programme under Part
1 of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp
17) as the debtor or has, under Scots law, made a composition or
35arrangement with, or granted a trust deed for, the member’s
creditors,
(d)
the member is unfit to continue the appointment because of
misconduct,
(e)
the member has failed to comply with the terms of the appointment,
40or
(f)
the member is otherwise unable, unfit or unwilling to carry out the
member’s functions.
Budget Responsibility and National Audit BillPage 21
11
The Comptroller and Auditor General is to be the chief executive (but not an
employee) of NAO.
12
(1)
The employee members are to be appointed by the non-executive members
as follows.
(2)
10If there is a vacancy, the Comptroller and Auditor General must recommend
a person to the non-executive members for appointment.
(3) The non-executive members may—
(a) appoint that person, or
(b)
require the Comptroller and Auditor General to recommend another
15person (in which event this sub-paragraph applies again and so on
until someone is appointed).
13
(1)
The terms of an employee member’s appointment are to be determined by
the non-executive members.
(2) 20The terms may include remuneration arrangements which—
(a)
may make provision for a salary, allowances and other benefits but,
subject to sub-paragraph (4), not a pension, and
(b)
may include a formula or other mechanism for adjusting one or more
of those elements from time to time.
(3)
25Amounts payable by virtue of sub-paragraph (2) are to be paid by NAO
(subject to sub-paragraph (4)).
(4)
If the employee is a participant in a pension scheme under the terms of the
person’s employment with NAO, the remuneration arrangements may
make provision for the person’s service as an employee member to be
30treated, for the purposes of the scheme, as if it were service as an employee
of NAO.
14 The appointment of an employee member terminates—
(a)
if the terms of the member’s appointment provide for it to expire at
35the end of a period, at the end of that period, and
(b) in any event, when the member ceases to be an employee of NAO.
15
An employee member may resign by giving written notice to the non-
executive members.
Budget Responsibility and National Audit BillPage 22
16
The non-executive members may terminate the appointment of an employee
member by giving the member written notice if—
(a)
the member has been absent from meetings of NAO without NAO’s
permission for a period of more than 3 months,
(b)
5the member has become bankrupt or has made an arrangement with
creditors,
(c)
the member’s estate has been sequestrated in Scotland or the
member has entered into a debt arrangement programme under Part
1 of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp
1017) as the debtor or has, under Scots law, made a composition or
arrangement with, or granted a trust deed for, the member’s
creditors,
(d)
the member is unfit to continue the appointment because of
misconduct,
(e)
15the member has failed to comply with the terms of the appointment,
or
(f)
the member is otherwise unable, unfit or unwilling to carry out the
member’s functions.
17 (1) NAO may employ staff.
(2)
In determining the terms of employment of any staff, NAO must have
regard to the desirability of keeping the terms broadly in line with those
applying to civil servants.
(3)
25A person who is an employee of NAO may not hold any office or position to
which a person may be appointed, or recommended for appointment, by or
on behalf of the Crown.
18 NAO must make rules for the purpose of regulating NAO’s procedure.
19
If the rules provide for a quorum for any meetings of NAO, the quorum
cannot be met unless a majority of the members present are non-executive
35members.
20 (1) The rules may include—
(a)
provision for the setting up of committees of NAO and for those
committees to set up sub-committees, and
(b)
40provision regulating the procedures of those committees and sub-
committees.
Budget Responsibility and National Audit BillPage 23
(2)
An employee of NAO who is not an employee member may be a member of
a committee or sub-committee.
(3)
A person who is neither a member of NAO nor an employee of NAO may
be a member of a committee or sub-committee, provided that no functions
5of NAO are delegated to the committee or sub-committee (see paragraph
23).
21
10NAO may do anything calculated to facilitate, or incidental or conducive to,
the carrying out of any of its functions.
22
The validity of anything done by NAO, the non-executive members or any
committee or sub-committee is not affected by—
(a) 15a vacancy, or
(b) a defective appointment.
23
(1)
NAO may delegate functions to any of its members, employees or
committees.
(2)
20A committee may delegate functions (including functions delegated to it) to
a sub-committee.
(3)
The delegation of a function does not prevent NAO or the committee (as the
case may be) from carrying out the function itself.
(4) Functions under the following provisions may not be delegated—
(a) 25section 23(2) of this Act;
(b) paragraph 18 or 25(1) of this Schedule;
(c) paragraph 1(1), 3(1) or (3), 7(3), 9(1) or 10(1) to (5) of Schedule 3.
24
(1)
Resource accounts of the kind mentioned in section 5 of the Government
30Resources and Accounts Act 2000 must be prepared for NAO for each
financial year by the person appointed as accounting officer under this
paragraph.
(2)
The Public Accounts Commission must appoint the Comptroller and
Auditor General or some other appropriate person as accounting officer.
(3)
35The person appointed as accounting officer must carry out any other
functions determined by the Commission.
25 (1) NAO must appoint an auditor for NAO for each financial year.
Budget Responsibility and National Audit BillPage 24
(2)
The approval of the Public Accounts Commission is required for the
appointment (including its terms).
(3)
The auditor must be eligible for appointment as a statutory auditor by virtue
of Chapter 2 of Part 42 of the Companies Act 2006.
(4)
5Section 1214 (independence requirement) and section 1216 (effect of
appointment of a partnership) of that Act apply as if the audit of NAO were
a statutory audit.
(5) The auditor must examine NAO’s resource accounts for the financial year.
(6)
Sections 6(1) and 25(2) of the Government Resources and Accounts Act 2000
10apply (with any necessary modifications) in relation to the examination as
they apply in relation to an examination by the Comptroller and Auditor
General of the resource accounts of a department.
(7) On completion of the examination the auditor must—
(a) certify the accounts, and
(b)
15send them, together with the auditor’s report on them, to the Public
Accounts Commission.
(8)
The Commission must lay the accounts and report before the House of
Commons.
26
(1)
The terms of the auditor’s appointment may require the auditor to carry out
20economy, efficiency and effectiveness examinations of the use of NAO’s
resources.
(2)
On completion of the examinations the auditor must prepare a report and
send it to the Public Accounts Commission.
(3) The Commission must lay the report before the House of Commons.
27
(1)
25The auditor may require access at any reasonable time to any document
where the auditor reasonably thinks it necessary for the purposes of the
auditor’s functions under paragraph 25 or 26.
(2)
The auditor may also require any person holding or accountable for any
document to provide any information or explanation that the auditor
30reasonably thinks necessary for those purposes.
28 (1) The application of NAO’s seal is to be authenticated by the signature of—
(a) a member of NAO, or
(b)
any person authorised (whether generally or specifically) for the
35purpose by a member of NAO.
(2)
A document purporting to be duly executed under NAO’s seal or signed on
its behalf—
(a) is to be received in evidence, and
(b)
is to be taken to be executed or signed in that way, unless the
40contrary is proved.
(3) This paragraph does not extend to Scotland.
Budget Responsibility and National Audit BillPage 25
Section 22
1 (1) NAO and the Comptroller and Auditor General must jointly—
(a) 5prepare a strategy for the national audit functions, and
(b)
review the strategy (and revise it as appropriate) at least once every
12 months.
“The national audit functions” means NAO’s functions and the Comptroller
and Auditor General’s functions.
(2) 10The strategy must—
(a)
for the period for the time being covered by it, include a plan for the
use of resources for the national audit functions;
(b)
for each financial year for the time being covered by it, specify the
maximum amount of resources to be provided by NAO for the
15purposes of paragraph 2(1).
(3)
The strategy (including any revision) must be approved by the Public
Accounts Commission.
(4)
For this purpose the person who chairs NAO and the Comptroller and
Auditor General must jointly submit the strategy (or revision) to the
20Commission.
(5)
Before approving the strategy (or revision) the Commission must review it
and may modify it.
(6)
In doing this the Commission must have regard to any advice given by the
Treasury.
(7)
25NAO and the Comptroller and Auditor General must each give effect to the
strategy.
2
(1)
NAO must provide resources for the Comptroller and Auditor General’s
functions as required by the Comptroller and Auditor General.
(2) 30In particular, NAO is responsible for—
(a) employing staff to assist in the carrying out of those functions,
(b) procuring services for the purposes of those functions,
(c)
holding documents or information acquired or generated in the
course of, or otherwise for the purposes of, those functions (see,
35further, paragraph 13), and
(d) keeping records in relation to those functions,
as required by the Comptroller and Auditor General.
(3)
For any financial year the maximum amount of resources that the
Comptroller and Auditor General may require for the purposes of sub-
40paragraph (1) is the maximum amount specified for that year under
paragraph 1(2)(b).
(4) Sub-paragraph (1) is also subject to paragraph 3.
Budget Responsibility and National Audit BillPage 26
3
(1)
The Comptroller and Auditor General may provide services that are not
within sub-paragraph (2) only with NAO’s approval.
(2)
The services within this sub-paragraph are services provided by the
5Comptroller and Auditor General—
(a) to NAO by virtue of Schedule 2 to this Act,
(b)
that are part of, or are incidental to, the Comptroller and Auditor
General’s functions under the following Acts—
(i) the Exchequer and Audit Departments Act 1866,
(ii) 10the Exchequer and Audit Departments Act 1921,
(iii) the National Loans Act 1968,
(iv) the National Audit Act 1983, and
(v) the Government Resources and Accounts Act 2000, or
(c)
that consist of, or are incidental to, an audit, examination or
15inspection that the Comptroller and Auditor General is required or
authorised to carry out by a statutory provision, other than section
1226 of the Companies Act 2006 (eligibility for appointment as a
statutory auditor) and any provision of this Part of this Act.
(3)
If NAO approves the provision of any services under sub-paragraph (1), it is
20for NAO to determine the maximum amount of resources that the
Comptroller and Auditor General may require for the services for the
purposes of paragraph 2(1).
(4)
In this Schedule “NAO-approved services” means services provided with
NAO’s approval under sub-paragraph (1).
4
NAO must, in such manner as it considers appropriate, monitor the carrying
out of the Comptroller and Auditor General’s functions.
5
(1)
NAO may provide advice to the Comptroller and Auditor General about the
Comptroller and Auditor General’s functions.
(2)
30The Comptroller and Auditor General must have regard to any advice
given.
6
(1)
The Comptroller and Auditor General may prepare a scheme for the
delegation of functions of that office to employees of NAO.
(2)
35The scheme (including any revision) must be approved by the Public
Accounts Commission.
(3)
If the Commission approves the scheme (or any revision), the Comptroller
and Auditor General may delegate functions in accordance with it.
(4)
A delegation does not prevent the Comptroller and Auditor General from
40doing anything personally.
Budget Responsibility and National Audit BillPage 27
7
(1)
This paragraph applies if the office of Comptroller and Auditor General is
vacant.
(2) This paragraph also applies if—
(a)
5the Speaker of the House of Commons certifies to that House that, in
the view of the Speaker, the ability of the person who is Comptroller
and Auditor General to carry out the functions of that office is
seriously impaired because of ill health (whether mental or physical),
and
(b) 10this paragraph has not previously applied in relation to that person.
(3)
NAO may, with the agreement of the Public Accounts Commission,
authorise an employee of NAO to carry out the Comptroller and Auditor
General’s functions during the vacancy or period of ill health.
(4) The “period of ill health” means the period—
(a)
15starting when the Speaker of the House of Commons certifies to that
House as mentioned in sub-paragraph (2)(a), and
(b)
ending when the Speaker certifies to that House that, in the view of
the Speaker, the person’s ability to carry out the functions of the
Comptroller and Auditor General is no longer seriously impaired
20because of ill health.
(5)
The functions to which sub-paragraph (3) applies include the function of
delegating under paragraph 6.
(6)
In relation to a vacancy or period of ill health of more than 6 months,
functions may not be carried out by virtue of sub-paragraph (3) after the end
25of the first 6 months.
8
(1)
NAO may charge fees for audits carried out by the Comptroller and Auditor
General.
(2) Any fees must be charged in accordance with a scheme prepared by NAO.
(3)
30The scheme (including any revision) must be approved by the Public
Accounts Commission.
(4)
The agreement of a Minister of the Crown is required for the charging of a
fee if the accounts to be audited are the accounts of a body or other person
who acts on behalf of the Crown.
(5)
35Sub-paragraphs (1) to (4) do not apply in relation to an audit carried out as
part of any NAO-approved services.
(6)
The Comptroller and Auditor General may charge fees and other amounts
in relation to NAO-approved services, but only in accordance with the
agreement or other arrangements under which the services are provided.
(7)
40Fees and other amounts received by the Comptroller and Auditor General
must be paid to NAO.
Budget Responsibility and National Audit BillPage 28
(8)
Fees and other amounts received by NAO under this paragraph must be
paid into the Consolidated Fund.
9
(1)
NAO and the Comptroller and Auditor General must, as soon as practicable
5after the end of each financial year, jointly prepare a report on the carrying
out during the year of the national audit functions (see paragraph 1(1)).
(2)
The person who chairs NAO and the Comptroller and Auditor General must
jointly submit the report to the Public Accounts Commission.
(3) The Commission must lay the report before Parliament.
10
(1)
NAO and the Comptroller and Auditor General must jointly prepare a code
of practice dealing with the relationship between NAO and the Comptroller
and Auditor General.
(2)
In doing this, they must (in particular) seek to reflect the principle set out in
15section 17(1) and (2), subject to any limitations on that principle that are
agreed between the Public Accounts Commission, NAO and the
Comptroller and Auditor General.
(3)
NAO and the Comptroller and Auditor General must jointly review the code
regularly and revise it as appropriate.
(4) 20In preparing or revising the code, they must consult the Treasury.
(5)
They must also consider any proposals for revisions of the code made by the
Commission from time to time.
(6) The code (including any revision) must be approved by the Commission.
(7)
For this purpose, the person who chairs NAO and the Comptroller and
25Auditor General must jointly submit the code (or revision) to the
Commission.
(8)
If the Commission approves the code (or revision), the Commission must lay
it before Parliament (stating the time from which it takes effect).
(9)
NAO and the Comptroller and Auditor General must each comply with the
30code.
11
(1)
For the purposes of preparing or revising the code, the NAO must agree to
the code (including any revision) in accordance with this paragraph.
(2) The agreement must be given at a meeting of NAO.
(3)
The agreement may be given only if at least one half of the non-executive
35members present and voting on the matter vote in favour of giving the
agreement.
(4)
The requirements of this paragraph are in addition to any other
requirements relating to NAO’s procedure.
12 (1) The code must include—
(a)
40provision as to how the strategy required by paragraph 1 is to be
prepared, reviewed and revised;
Budget Responsibility and National Audit BillPage 29
(b)
provision about the matters to be covered by the strategy and the
periods to be covered by it from time to time;
(c)
provision as to how resources are to be provided for the purposes of
paragraph 2(1);
(d)
5provision about the preparation of estimates for the purposes of
section 23;
(e)
provision as to how NAO is to make decisions for the purposes of
paragraph 3;
(f)
provision as to how NAO is to monitor the Comptroller and Auditor
10General’s functions for the purposes of paragraph 4;
(g)
provision as to how advice is to be given by NAO for the purposes of
paragraph 5, including the nature of the advice to be given;
(h)
provision as to how the Comptroller and Auditor General is to
charge fees and other amounts under paragraph 8;
(i)
15provision about the extent to which NAO’s functions are to be
delegated to the Comptroller and Auditor General (see paragraph 23
of Schedule 2);
(j)
provision restricting the public comments that a non-executive
member of NAO may make in relation to the carrying out of the
20Comptroller and Auditor General’s functions.
(2) The code may also make provision about—
(a)
the way in which reports required by paragraph 9 are to be prepared
and the matters to be covered by those reports;
(b)
matters about which NAO or the Comptroller and Auditor General
25(or both) are to consult the Public Accounts Commission from time
to time;
(c) standards for corporate governance.
(3)
This paragraph is not exhaustive as regards the matters that may be covered
by the code.
13
(1)
Any document or information which a person is required to provide, or may
provide, to the Comptroller and Auditor General, may be provided to NAO
(either by that person or the Comptroller and Auditor General).
(2)
For the purposes of section 3(2) of the Freedom of Information Act 2000 any
35document or information held by NAO as mentioned in paragraph 2(2)(c) is
treated as held by NAO on its own behalf.
(3)
The documents and information to be held by NAO as mentioned in
paragraph 2(2)(c) include documents and information previously held by
the National Audit Office established by section 3 of the National Audit Act
401983.