PUBLIC ACCOUNTS COMMITTEE
Report by Mr Robert
Sheldon, Chairman of the Committee
Introduction
1. As the separate statistical
summary of the Committee's work shows, the Committee of Public
Accounts has continued to pursue the objectives defined by its
Standing Order (S.O. No 122); and, during the course of the current
Parliament, has to date published 211 Reports. In addition it
has considered significant reports on the matters set out in the
following paragraphs.
2. In Session 1993-94, the
Committee published a most important report (8th Report (93-94)
The Proper Conduct of Public Business (HC 154)) on failures in
the financial and administrative controls in Departments and other
public bodies. It contained examples of failings in key areas
of financial control, compliance, stewardship, and the safeguarding
of the taxpayer's money. Together with those examples was set
out a checklist of procedures designed to guard against the risk
of such lapses in the proper conduct of public business. Since
its publication this report has taken on the significance of a
base reference paper, the principles of which were used by the
Nolan Committee and have been supported by the Executive and by
professional accounting organisations alike. It has now been
followed up by detailed guidance by the Treasury in its "Regularity
and Propriety" Report issued to all Accounting Officers.
3. On the development of
consideration by the House of Estimates and accounting procedures
the Committee has agreed the following reports:
- 25th Report (93-94)
Financial Reporting to Parliament: Changes in the Format of Supply
Estimates (HC 386)
- 15th Report (94-95)
Resource Accounting and Budgeting in Parliament (HC 407)
- 9th Report (96-97)
Resource Accounting and Proposals for a Resource-Based System
of Supply (HC 167)
4. The Committee has also
given consideration to the management of, and accountability for,
European Community Expenditure, viz:
- 15th Report (94-95)
The Annual Report of the European Court of Auditors and the Statement
of Assurance (HC 250)
5. The Committee has maintained
its keen interest in the examination of the value-for-money studies
of economy, efficiency and effectiveness of Government Departments
and other bodies made by the Comptroller and Auditor General (Sir
John Bourn) and the Controller and Auditor General for Northern
Ireland (Mr John Dowdall); but the Committee has also drawn attention,
in the most serious of terms, to the lessons that could be taken
from those incidents of misappropriation and fraudulent use of
public funds presented for its consideration.
Scrutiny of Agencies and other
non-departmental public bodies
6. Within its terms of reference,
and the limitations on the Comptroller and Auditor Generals' access
set by statute and otherwise, the Committee has investigated a
wide number of issues related to Executive Agencies and other
non-departmental public bodies. Together with the Chairman of
the Public Accounts Commission, the Chairman of the Committee
has made a number of representations proposing that the authority
of the Comptroller and Auditor General, in terms of audit and
access arrangements, should be extended to the totality of non-departmental
pubic bodies.
Resources - Constraints caused
by lack of staff and Members' time and the use made by Committees
of Specialist Advisers
7. The Committee's Standing
Order (SO No. 122) does not include power to appoint specialist
advisers. For the Committee of Public Accounts, this essential
service is provided by the Comptroller and Auditor General and
his counterpart for Northern Ireland who, using the resources
of their respective offices, act as the Committee's principal
advisers. It is their published reports and memoranda submitted
to the Committee, which provide the majority of briefing material
for the Committee.
8. The Committee also works
closely with the Treasury Officer of Accounts, who, together with
his colleagues, attend the majority of the Committee's public
meetings. Their liaison with the Committee is reinforced by the
Financial Secretary to the Treasury being a Member of the Committee.
9. The Committee usually
meets twice a week when the House is sitting. It is served by
its Clerk, a Committee Assistant and a Personal Secretary. The
volume and pace of the work set by the Committee itself, generated
by the Comptroller and Auditor General's target of providing for
the Committee's consideration 50 value for money reports each
year, together with the inquiries presented by Members of Parliament
and others throughout the year, place considerable pressure on
the Committee's Members and officials, and on the Comptroller
and Auditor General and his staff in terms of preparation for,
and attendance at, the 204 meetings held so far this Parliament.
It is therefore difficult to conceive how Members could devote
more time to the Committee.
Relations with Departmental
Committees and NAO
10. As stated in paragraph
7, the Comptroller and Auditor General and his Northern Ireland
counterpart act as the Committee's principal advisers, and their
offices provide the majority of the Committee's briefing material.
Relations with the two offices are excellent and work well for
the benefit of the Committee and the House.
11. Relationships with departmental
select committees operate constructively to avoid overlap in accordance
with the terms of the National Audit Act 1983, with the recommendations
contained in the Second Report of the Procedure Committee of session
1989-90 (HC 19-I) and the Government's response thereto (Cm 1532),
and with undertakings given during the course of the debate on
Standing Orders (Amendments) (HC Deb 18.7.1991 cols 579-606).
Under these arrangements, departmental select committees are
kept informed of the Comptroller and Auditor General's two-year
rolling programmes of work and of the commencement of the main
study stages of National Audit Office investigations.
12. These arrangements were
established and subsequently confirmed in recognition of the statutory
right of the Comptroller and Auditor General to have complete
discretion in the discharge of his functions and, "in particular,
in determining whether to carry out any examination under Part
II of the National Audit Act 1983 and the manner in which any
such examination is carried out"; but also recognising that
"he shall take into consideration any proposal made by the
Committee of Public Accounts" (National Audit Act 1983, Part
I, Section 1(3)). However, the Act also states specifically,
that he is not entitled "to question the merits of the policy
objectives of any department"....."
13. The Committee would
give careful consideration to any suggestions to extend or develop
the assistance given by the Comptroller and Auditor General to
departmental select committees, provided that the statutory duties
and limitations placed on the Comptroller and Auditor General,
as well as the processes advocated by the Procedure Committee
and by subsequent undertakings, given in the course of the 1991
debate on Standing Orders (Amendments) are respected. Thus, any
suggested development would also need to respect
the priorities of the Committee
of Public Accounts in pursuing its own inquiries, as well as the
requirement not to prejudice the operations of the Comptroller
and Auditor General in the pursuit of his statutory audit duty,
his value for money investigations and his continuing responsibilities
to the Committee of Public Accounts.
Difficulties in obtaining
evidence from Government Departments and the
summoning of named witnesses
14. The letters of appointment
of Accounting Officers of Government Departments, of Executive
Agencies and of other public bodies impose the duty "of being
a witness before the Committee of Public Accounts"; and it
is the Committee's usual practice to summon Accounting Officers
by name. This practice has caused no significant problem.
15. The Committee received
recently formal notice from the Permanent Secretary of the Department
of Transport advising that he had decided to cease the practice
of classifying the papers of his Department and its Agencies as
`Not for NAO eyes'. In subsequent evidence (HC (16.12.96) 168-i)
the Committee welcomed the move as "an excellent decision".
The Committee now hopes that other Government Departments throughout
Whitehall will also be encouraged to abandon the practice of denying
the Comptroller and Auditor General's access to certain papers.
