Public Accounts Commission Ninth Report


THE NORTHERN IRELAND AUDIT OFFICE

32. The Public Accounts Commission currently exercises functions in respect of the Northern Ireland Audit Office on a non-statutory basis, but similar to those which it performs under statute in respect of the National Audit Office.

NIAO's Corporate Plans and Estimates

33. As in the case of the NAO, the Commission considers the Corporate Plans of the NIAO in June or July and the draft Estimates in the following December or January. In December 1996, the Commission considered the draft Estimate for the NIAO for 1997-98. The Estimate largely followed the proposals set out in the Corporate Plan for 1997-98 to 1999-2000 which had been endorsed by the Commission in July 1996. The Estimate budgeted for a 4 per cent increase in work load to be met by a 2 per cent increase in budget in real terms and 2 per cent efficiency savings.

34. The net provision required in the Estimate (£3,645 million) was £40,000 more than the amount approved in the Corporate Plan. This increase represented NIAO's higher contribution to the Department of Finance and Personnel, Northern Ireland (DFP(NI)) resulting from recommendations by the Government Actuary that contributions should be based on different rates for different salary bands. The DFP(NI) was content with the Estimate.

35. The main features of the Corporate Plan for 1998-99 to 2000-01 carried forward and developed the objectives for the NIAO which had been agreed by the Commission in July 1996. Primary among them were the need to take account of the introduction of resource accounting and the creation of 15 new Executive Agencies with a further 11 expected by 2000-01. That meant that the NIAO would be dealing with an increasing number of Executive Agencies at a time when it had also to carry out 11 resource account dummy runs. As a result, forecast expenditure for 1998-99 was £3.843 million, a real terms increase in net expenditure over the previous year of 2.6 per cent.

36. The Estimate for 1998-99 which the Commission considered in December 1997 was identical to that in the Corporate Plan. Due to the financial workload being greater than expected the net provision of £3.843 million was £118,000 more than NIAO's PES allocation for 1998-99. This was to be addressed through in-year Block adjustments in 1998-99.

37. At its meetings in December 1996 and 1997, the Commission also noted the NIAO Vote on Account which would be incorporated in an Appropriation Order to be presented in Parliament in the following Spring.

External Audit Arrangements for Public Sector Bodies in Northern Ireland

38. Following the recommendations of the Committee on Standards in Public Life the Government undertook a review of the external audit arrangements of public bodies. It consulted the Comptroller and Auditor General for Northern Ireland on the most suitable arrangements for Northern Ireland. After discussions, the DFP(NI) recommended that, while retaining their distinctive roles and responsibilities, the audit functions of Health and Local Government should be attached to the NIAO. The C&AG(NI) would assume responsibility for the staffing and professional development of the new divisions and would have a more comprehensive overview of audit issues in the region. The total complement of the NIAO would increase from 101 to 126 - the increase being the number of staff employed by the Health and Local Government Audits.

39. The Commission agreed that the external audit arrangements should be more independent. It approved the changes proposed by the DFP(NI).

Appointment of Auditor

40. In December 1997 the Commission considered the procedures to be followed for the appointment of new independent auditors for the NIAO, following the resignation of Deloitte & Touche with effect from the audit of the 1996-97 accounts. Although statutory responsibility rests with the DFP(NI) it was agreed that, as in 1993 when Deloitte & Touche were appointed[9], an appointment would be made only on the advice of the Commission.

41. The Commission has recommended that A S M Horwath be appointed as auditors of the NIAO for the five-year period beginning with the 1997-98 accounts. It is grateful to Deloitte & Touche for they way in which they have discharged their responsibilities over the last four years.


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Prepared 10 July 1998