Select Committee on Liaison First Report



Report by Mr Robert Sheldon, Chairman of the Committee


  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.

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Prepared 13 March 1997