Local Audit and Accountability Bill (HL Bill 42)

(a) in paragraph (a) after “Wales,” insert “and”, and

(b) omit paragraph (c) and the “and” preceding it.

61 (1) The amendments of Schedule 3 to the Public Audit (Wales) Act 2004 by
paragraph 60 do not affect—

(a) 5the transfers of property, rights and liabilities of the Audit
Commission to the Auditor General for Wales by a scheme under
that Schedule, or

(b) the operation of that Schedule or of such a scheme in relation to those
transfers.

(2) 10In this paragraph “the Audit Commission” means the Audit Commission for
Local Authorities and the National Health Service in England.

Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27)Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27)

62 In section 16 of the Companies (Audit, Investigations and Community
Enterprise) Act 2004 (grants to bodies concerned with accounting standards
15etc) after subsection (6) insert—

“(6A) References in this section to Part 42 of the Companies Act 2006 or to
paragraph 21, 22, 23(1) or 24(1) of Schedule 10 to that Act include that
Part or paragraph as it has effect by virtue of Schedule 5 to the Local
Audit and Accountability Act 2013 (which applies Part 42 with
20modifications in relation to audits of local authorities etc).

(6B) The reference in the definition of “professional accountancy body” in
subsection (5) to section 1220 of the Companies Act 2006 includes a
reference to section 1219 of that Act as it has effect by virtue of
Schedule 5 to the Local Audit and Accountability Act 2013.”

25Children Act 2004 (c. 31)Children Act 2004 (c. 31)

63 In section 20(4) of the Children Act 2004 (joint area review: persons to whom
that section applies) omit paragraph (e).

Education and Inspections Act 2006 (c. 40)Education and Inspections Act 2006 (c. 40)

64 (1) Schedule 13 to the Education and Inspections Act 2006 (interaction between
30Her Majesty’s Chief Inspector of Education, Children’s Services and Skills
and other authorities) is amended as follows.

(2) In paragraph 1 (meaning of inspection authorities)—

(a) in sub-paragraph (2)—

(i) at the end of paragraph (d) insert “, and”, and

(ii) 35omit paragraph (h) and the “and” preceding it, and

(b) in sub-paragraph (3), for paragraph (f) substitute—

“(f) the Care Quality Commission.”

(3) In paragraph 8 (advice or assistance for other public authorities)—

(a) after sub-paragraph (1) insert—

“(1A) 40The Chief Inspector may do anything the Chief Inspector
thinks appropriate to facilitate the carrying out of an
inspection under section 10 of the Local Government Act
1999 (inspection of best value authorities).”, and

(b) for sub-paragraph (2) substitute—

“(2) Anything done under this paragraph may be done on such
terms as the Chief Inspector thinks fit.”

(4) In paragraph 10(a) (charges for advice or assistance) for “providing advice
5or assistance” substitute “doing anything”.

National Health Service Act 2006 (c. 41)National Health Service Act 2006 (c. 41)

65 The National Health Service Act 2006 is amended as follows.

66 In Schedule 1A (clinical commissioning groups), in paragraph 17(5), for the
words from “Audit Commission Act 1998” to the end substitute “Local
10Audit and Accountability Act 2013”.

67 Schedule 7 (constitution of public benefit corporations: auditors) is amended
as follows.

68 (1) Paragraph 23 is amended as follows.

(2) In sub-paragraph (3)—

(a) 15after “may be” insert “an individual or a firm”, and

(b) omit paragraphs (a) to (c).

(3) In sub-paragraph (4)—

(a) after paragraph (a) insert—

“(aa) eligible for appointment as a local auditor (see Part
204 of the Local Audit and Accountability Act 2013),
or”,

(b) omit paragraph (b), and

(c) in paragraph (c) for “any other” substitute “a”.

(4) Omit sub-paragraph (5).

(5) 25In sub-paragraph (7)—

(a) omit the definition of “the Audit Commission” (and the “and” which
follows it), and

(b) in the definition of “firm” for “the Audit Commission Act 1998 (see
section 51(3) of that Act)” substitute “section 1261(1) of the
30Companies Act 2006”.

69 (1) Paragraph 24 is amended as follows.

(2) After sub-paragraph (4) insert—

“(4A) The auditor must, in carrying out functions in relation to the
accounts—

(a) 35comply with the code of audit practice applicable to the
accounts that is for the time being in force (see Schedule 6
to the Local Audit and Accountability Act 2013), and

(b) have regard to guidance issued by the Comptroller and
Auditor General under paragraph 9 of that Schedule (as it
40has effect by virtue of paragraph 10(6) of that Schedule).

(4B) The auditor of the accounts must comply with any directions
given by the Secretary of State as to arrangements to monitor the
standard of the work of auditors in the performance of audits

under this paragraph (including arrangements to inspect that
work).

(4C) The arrangements mentioned in sub-paragraph (4B) may include
arrangements made by the regulator or by any other person the
5Secretary of State considers appropriate.”

(3) Omit sub-paragraph (5).

70 In Schedule 15 (accounts and audit of certain NHS bodies), in paragraph 4—

(a) in sub-paragraph (2) for the words from “Audit Commission Act
1998” to the end substitute “Local Audit and Accountability Act
102013”, and

(b) omit sub-paragraph (4).

71 (1) Until the repeal of Chapter 3 of Part 2 of the National Health Service Act 2006
by section 179 of the Health and Social Care Act 2012 is fully in force,
Schedule 4 to the National Health Service Act 2006 (NHS trusts) has effect
15with the following modifications.

(2) In paragraph 12 (reports and other information)—

(a) in sub-paragraph (2)(b) for “section 8 of the Audit Commission Act
1998 (c. 18)Audit Commission Act
1998 (c. 18) or paragraph 19 of Schedule 8 to the Government of
Wales Act 2006 (c. 32)Government of
Wales Act 2006 (c. 32)” substitute “paragraph 1 of Schedule 7 to the
20Local Audit and Accountability Act 2013”, and

(b) in sub-paragraph (2A) for “section 8 of the Audit Commission Act
1998” substitute “paragraph 1 of Schedule 7 to the Local Audit and
Accountability Act 2013”.

National Health Service (Wales) Act 2006 (c. 42)National Health Service (Wales) Act 2006 (c. 42)

72 25In paragraph 12(2)(b) of Schedule 3 to the National Health Service (Wales)
Act 2006 (NHS trusts established under section 18 of that Act: reports and
other information) omit “section 8 of the Audit Commission Act 1998 (c. 18)1998 (c. 18)
or”.

Companies Act 2006 (c. 46)Companies Act 2006 (c. 46)

73 30In Part 1 of Schedule 11A to the Companies Act 2006 (specified persons for
the purposes of the disclosure provisions in section 1224A of that Act), after
paragraph 17 insert—

“17A A recognised supervisory body as defined in section 1217(4) and
Schedule 10 as they have effect by virtue of Schedule 5 to the Local
35Audit and Accountability Act 2013.

17B A recognised qualifying body as defined in section 1219(12) as it
has effect by virtue of that Schedule.

17C A body designated by the Secretary of State under section 1252
(delegation of the Secretary of State’s functions) as it has effect by
40virtue of that Schedule.

17D A body with which a recognised supervisory body within the
meaning of that Act is participating in arrangements for the
purposes of paragraph 23 (independent monitoring of certain

audits) or 24 (independent investigation of public interest cases) of
Schedule 10 as it has effect by virtue of that Schedule.”

Serious Crime Act 2007 (c. 27)Serious Crime Act 2007 (c. 27)

74 In paragraph 9 of Schedule 13 to the Serious Crime Act 2007 (modification of
5section 32D(8)(b) of the Audit Commission Act 1998 pending increase in
magistrates’ court sentencing powers) omit paragraph (a).

Local Government and Public Involvement in Health Act 2007 (c. 28)Local Government and Public Involvement in Health Act 2007 (c. 28)

75 The Local Government and Public Involvement in Health Act 2007 is
amended as follows.

76 10Omit section 148 (Benefit Fraud Inspectorate: transfers to the Audit
Commission).

77 In section 212(7) (entities controlled by local authorities: definitions)—

(a) in the definition of “English local authority” after “England” insert “,
and includes a local authority which exercises functions in relation to
15an area which is partly in England and partly in Wales”,

(b) for the definition of “financial year” substitute—

• ““financial year” means a period for which—

  (a)

  a statement of accounts of the local authority
  must be prepared by reason of section 3 of the
  20Local Audit and Accountability Act 2013, or

  (b)

  accounts of the local authority must be
  prepared by reason of section 13 of the Public
  Audit (Wales) Act 2004;”, and

(c) in the definition of “local authority” for paragraph (b) substitute—

“(b) 25in the case of a body in Wales, is required to prepare
statements of accounts by regulations made under
section 39 of the Public Audit (Wales) Act 2004;”.

78 (1) Section 214 (further provision about orders under section 212) is amended as
follows.

(2) 30In subsection (1)—

(a) after “section 212” insert “made by the Welsh Ministers”,

(b) before “local authority” insert “Welsh”, and

(c) for “the appropriate person” substitute “the Auditor General for
Wales”.

(3) 35Omit subsection (2).

(4) In subsection (9) after “qualifying person” insert—

• “Welsh local authority;”.

(5) Omit subsection (10).

79 Omit Schedule 10 (Benefit Fraud Inspectorate: transfer schemes).

80 (1) 40The repeals of section 148 of and Schedule 10 to the Local Government and
Public Involvement in Health Act 2007 by paragraphs 76 and 79 do not
affect—

(a) the transfers of property, rights and liabilities of the Secretary of State
or a person authorised under section 139A of the Social Security
Administration Act 1992 to the Audit Commission by a scheme
under that section and that Schedule, or

(b) 5the operation of that section and that Schedule or of such a scheme in
relation to those transfers.

(2) Sub-paragraph (1) is subject to the provisions of a transfer scheme under
paragraph 1 of Schedule 1 (transfer of property, rights and liabilities to
Audit Commission).

(3) 10In this paragraph “the Audit Commission” means the Audit Commission for
Local Authorities and the National Health Service in England.

Health and Social Care Act 2008 (c. 14)Health and Social Care Act 2008 (c. 14)

81 The Health and Social Care Act 2008 is amended as follows.

82 Omit section 56 (role of Audit Commission in undertaking or promoting
15health care studies).

83 (1) Schedule 4 (interaction between Care Quality Commission and other
authorities) is amended as follows.

(2) In paragraph 1 (meaning of inspection authorities)—

(a) in sub-paragraph (2)—

(i) 20at the end of paragraph (d) insert “, and”, and

(ii) omit paragraph (g) and the “and” preceding it, and

(b) in sub-paragraph (3)—

(i) at the end of paragraph (d) insert “, and”, and

(ii) omit paragraph (g) and the “and” preceding it.

(3) 25In paragraph 9 (advice or assistance for other public authorities)—

(a) after sub-paragraph (1) insert—

“(1A) The Commission may do anything it thinks appropriate to
facilitate the carrying out of an inspection under section 10
of the Local Government Act 1999 (inspection of best value
30authorities).”, and

(b) for sub-paragraph (2) substitute—

“(2) Anything done under this paragraph may be done on such
terms, including terms as to payment, as the Commission
thinks fit.”

35Housing and Regeneration Act 2008 (c. 17)2008 (c. 17)

84 The Housing and Regeneration Act 2008 is amended as follows.

85 Omit section 106A (co-operation between the Regulator of Social Housing
and the Audit Commission).

86 In section 128(4)(a) (duty of local authority which is registered provider of
40social housing to send reports under section 8 of the Audit Commission Act
1998 to the Regulator), for “any immediate report under section 8 of the
Audit Commission Act 1998 (immediate and other reports in the public

interest)” substitute “any report under paragraph 1 of Schedule 7 to the
Local Audit and Accountability Act 2013 (public interest reports)”.

87 In section 196(1) (duty of Regulator to consult listed bodies before setting
standards etc) omit paragraph (d) (the Audit Commission).

88 5In section 197(4) (duty of Secretary of State to consult listed bodies before
giving direction to Regulator) omit paragraph (c).

89 In section 201 (arrangements by Regulator for inspections by third party)
omit subsection (7A) (inspections treated as carried out by regulator for
purposes of Schedule 2A to the Audit Commission Act 1998).

90 (1) 10Section 210A (extraordinary report: local authorities) is amended as follows.

(2) In subsection (1), for the words from “the Audit Commission” to the end
substitute “the regulator may require the local authority to allow its
accounts, so far as they relate to the provision of social housing, to be audited
by a local auditor appointed by the regulator.”

(3) 15After subsection (1) insert—

“(1A) The regulator may not appoint a local auditor to audit the accounts
of a local authority if that person—

(a) is the person (or one of the persons) appointed under or by
virtue of the Local Audit and Accountability Act 2013 to
20audit the authority’s accounts, or

(b) was the person (or one of the persons) who carried out the
most recent completed audit of the authority’s accounts
under or by virtue of that Act.

(1B) Sections 19(1), (2), (5) and (6), 21 and 22 of the Local Audit and
25Accountability Act 2013 (local auditors’ general duties and right to
documents etc) apply in relation to an audit under this section as
they apply in relation to an audit of the local authority under or by
virtue of that Act.

(1C) On completion of the audit under this section, the local auditor must
30report to the regulator about such matters and in such form as the
regulator determines.”

(4) Omit subsections (2) and (3).

(5) In subsection (4) for “Audit Commission’s costs of preparing the report”
substitute “costs of the audit (including the local auditor’s remuneration)”.

(6) 35For subsection (5) substitute—

“(5) In this section—

• “accounts” has the meaning given by section 4 of the Local
  Audit and Accountability Act 2013;

• “local auditor” means a person who is eligible for appointment
  40under or by virtue of the Local Audit and Accountability Act
  2013 as an auditor of the local authority’s accounts.”

(7) In the heading, for “report” substitute “audit”.

91 In section 249(1) (management transfer) after “section 210” insert “or 210A”.

Local Democracy, Economic Development and Construction Act 2009 (c. 20)Local Democracy, Economic Development and Construction Act 2009 (c. 20)

92 Chapter 3 of Part 2 of the Local Democracy, Economic Development and
Construction Act 2009 (audit of entities connected with local authorities) is
amended as follows.

93 (1) 5Section 36 (overview of Chapter) is amended as follows.

(2) In subsection (1)—

(a) for “an audit authority” substitute “the Auditor General for Wales”,
and

(b) omit “English or”.

(3) 10Omit subsections (2) and (4).

(4) In subsection (6)(b) omit “section 27 of the Audit Commission Act 1998
(c. 18) or”.

94 In section 37 (notification duties of local authorities) omit subsection (1).

95 (1) Section 38 (power to appoint auditor) is amended as follows.

(2) 15In subsection (1), for “an audit authority” substitute “the Auditor General for
Wales”.

(3) In subsection (3)(b)(ii)—

(a) for “audit authority” substitute “Auditor General for Wales”, and

(b) for “37(1)(a) or (2)(a)” substitute “37(2)(a)”.

(4) 20Omit subsection (4).

(5) In subsection (6), for “appointing audit authority” substitute “Auditor
General for Wales”.

(6) Omit subsection (7).

(7) In subsection (8), for “appointing audit authority” substitute “Auditor
25General for Wales”.

96 (1) Section 39 (power to appoint replacement auditor) is amended as follows.

(2) In subsection (1) for “an audit authority” substitute “the Auditor General for
Wales”.

(3) For the remaining references to “audit authority” substitute “Auditor
30General for Wales”.

97 (1) Section 40 (exclusions from power to appoint auditor) is amended as
follows.

(2) In subsection (1), for “An audit authority” substitute “The Auditor General
for Wales”.

(3) 35In each of subsections (2) to (4), for “appointing audit authority” substitute
“Auditor General for Wales”.

(4) In subsection (5) for “audit authority” substitute “Auditor General for
Wales”.

98 In section 41(1) (persons who may be appointed as auditor)—

(a) in paragraph (a), for “appointing audit authority” substitute
“Auditor General for Wales”, and

(b) in paragraph (b), for “that authority” substitute “the Auditor General
for Wales”.

99 (1) 5Section 42 (terms of appointment of auditor) is amended as follows.

(2) In subsection (5), for “appointing audit authority” substitute “Auditor
General for Wales”.

(3) Omit subsection (6).

100 (1) Section 43 (right of entity to appoint auditor to conduct statutory audit) is
10amended as follows.

(2) In each of subsections (3), (5) and (7), for “audit authority” substitute
“Auditor General for Wales”.

(3) In subsection (8)—

(a) for “an audit authority” substitute “the Auditor General for Wales”,

(b) 15in paragraph (a), for “audit authority” substitute “Auditor General
for Wales”, and

(c) for paragraph (b) substitute—

“(b) the Welsh Ministers.”

101 In section 44(5)(b) (functions of auditor not appointed to conduct statutory
20audit: duty to send report to appointing audit authority), for “appointing
audit authority” substitute “Auditor General for Wales”.

102 In section 45(4)(b) (duty of auditor to send public interest report to audit
authority), for “audit authority” substitute “Auditor General for Wales”.

103 In section 46 (codes of practice) omit subsections (1) to (3).

104 (1) 25Section 50 (fees for appointment of auditor) is amended as follows.

(2) Omit subsection (1).

(3) In subsection (3), for “Audit Commission or the Wales Audit Office (as the
case may be)” substitute “Wales Audit Office”.

(4) Omit subsection (4).

(5) 30In subsection (5)—

(a) omit “(4) or”, and

(b) for “Audit Commission or the Wales Audit Office (as the case may
be)” substitute “Wales Audit Office”.

(6) In subsection (6), for “Audit Commission or the Wales Audit Office (as the
35case may be)” substitute “Wales Audit Office”.

(7) Omit subsections (8) and (9).

(8) In subsection (12)—

(a) for “Audit Commission or the Wales Audit Office (as the case may
be)” in each place it occurs substitute “Wales Audit Office”, and

(b) 40for “(4) or (4A) (as the case may be)” substitute “(4A)”.

105 (1) Section 51 (power of audit authority to require information) is amended as
follows.

(2) In the heading, for “audit authority” substitute “Auditor General for Wales”.

(3) In subsection (1)—

(a) for “appointing audit authority” substitute “Auditor General for
Wales”, and

(b) 5for “it” substitute “the Auditor General for Wales”.

(4) In subsection (2)—

(a) for “an audit authority” substitute “the Auditor General for Wales”,
and

(b) for “authority” substitute “Auditor General for Wales”.

106 10Omit section 52 (subsidiaries of Passenger Transport Executives).

107 (1) Section 53 (regulations) is amended as follows.

(2) In subsection (1), for “36(4)(b) or (5)(b)” substitute “36(5)(b)”.

(3) Omit subsection (4).

(4) In subsection (5) omit “made by the Welsh Ministers”.

108 15In section 54(1) (interpretation) omit the definitions of “audit authority”,
“Audit Commission” and “qualifying English local authority entity”.

Equality Act 2010 (c. 15)2010 (c. 15)

109 In Part 1 of Schedule 19 to the Equality Act 2010 (general list of public
authorities to whom public sector equality duty applies) omit the entry for
20the Audit Commission for Local Authorities and the National Health Service
in England.

Police Reform and Social Responsibility Act 2011 (c. 13)2011 (c. 13)

110 The Police Reform and Social Responsibility Act 2011 is amended as follows.

111 In section 18(7) (delegation of functions by police and crime commissioners:
25exceptions), after paragraph (f) insert—

“(g) appointing a local auditor under section 7 of the Local Audit
and Accountability Act 2013;

(h) deciding whether to enter into a liability limitation
agreement under section 14 of that Act.”

112 30In section 19(7) (delegation of functions by Mayor’s Office for Policing and
Crime: exceptions), after paragraph (h) insert—

“(i) appointing a local auditor under section 7 of the Local Audit
and Accountability Act 2013;

(j) deciding whether to enter into a liability limitation
35agreement under section 14 of that Act.”

Charities Act 2011 (c. 25)2011 (c. 25)

113 The Charities Act 2011 is amended as follows.

114 (1) Section 149 (audit or examination of English NHS charity accounts) is
amended as follows.

(2) 40In subsection (2) for “a person appointed by the Audit Commission”

substitute “a person who—

(a) is eligible for appointment as a statutory auditor under Part
42 of the Companies Act 2006,

(b) is eligible for appointment as a local auditor (see Part 4 of the
5Local Audit and Accountability Act 2013), or

(c) is a member of a body for the time being specified in
regulations under section 154 and is under the rules of that
body eligible for appointment as auditor of the charity.”

(3) In subsection (3)—

(a) 10for “the Audit Commission” (where it first occurs) substitute “the
charity trustees”,

(b) in paragraph (a) for “a person appointed by the Audit Commission”
substitute “a person who is within subsection (2)(a), (b) or (c)”, and

(c) in paragraph (b) for “a person so appointed” substitute “a person
15who is qualified to be an independent examiner”.

(4) After subsection (3) insert—

“(3A) For the purposes of subsection (3)(b), a person is qualified to be an
independent examiner if (and only if)—

(a) the person is independent,

(b) 20the charity trustees reasonably believe that the person has the
requisite ability and practical experience to carry out a
competent examination of the accounts, and

(c) the person—

(i) falls within a description of person for the time being
25included in the list in section 145(3), or

(ii) is eligible for appointment as a local auditor (see Part
4 of the Local Audit and Accountability Act 2013).”

(5) Omit subsection (4).

(6) For subsection (5) substitute—

“(5) 30The Commission may—

(a) give guidance to charity trustees of an English NHS charity
in connection with the selection of a person for appointment
as an independent examiner;

(b) give such directions as it thinks appropriate with respect to
35the carrying out of an examination in pursuance of
subsection (3)(b);

and any such guidance or directions may either be of general
application or apply to a particular charity only.”

(7) Omit subsection (8).

115 (1) 40Section 151 (audit of accounts of larger groups) is amended as follows.

(2) In subsection (4)(b), for “a person appointed by the Audit Commission”
substitute “a person, appointed by the charity trustees of the parent charity,
who is within section 149(2)(a), (b) or (c)”.

(3) In subsection (6)—

(a) 45for “Subsections (4) and (6) of section 149 apply” substitute “Section
149(6) applies”, and