Audit CommitteeAnnual Report for 2000-01
1. This is the first Annual Report of
the House of Commons Audit Committee, which was established by
the Commission on 15 May 2000. The genesis of the Committee was
the Review of Management and Services of the House of Commons
by a team led by Mr Michael Braithwaite, which was published by
the Commission in July 1999.
2. That Review examined the control and
direction of the House's audit. It concluded that an Audit Committee,
with an external element, would enable the House to comply with
public sector best practice.
3. The Committee's membership is in accordance
with the recommendations of the Braithwaite review:
- Mrs Angela Browning MP (Chairman) (Sir George
Young MP was Chairman until 20 November 2000);
- Mr Archy Kirkwood MP;
- the Clerk of the House;
- the Director of Finance and Administration;
and
- Sir Thomas Legg KCB QC (external member)
4. Its terms of reference were adopted
by the Commission on 15 May:
- to have general oversight of the work of internal
audit and review, with particular emphasis on promoting economy,
efficiency and effectiveness, on value-for-money studies, and
on risk assessment and control assurance;
- to receive and consider reports from the Internal
Review Service (IRS), together with management letters and other
external audit material;
- to advise the Accounting Officer in the exercise
of his responsibilities;
- to consider and recommend to the Accounting Officer
the internal review programme;
- to encourage best financial practice, use of
resources and governance in the House administration; and
- to report annually, the report to be published
with the Commission's Annual Report.
THE WORK OF THE COMMITTEE
5. The Committee met four times during
the financial year 2000-01. It has received regular reports from
the IRS Director, who attended all its meetings. The Committee
endorsed IRS's terms of reference and its audit programme for
the year ending 31st October 2001.
6. Paragraph 15.70 of the Braithwaite
review suggested that the House should place a greater emphasis
on value for money audit work. The Committee accordingly took
a close interest in this area by monitoring the progress of an
external review of the provision of legal services, and recommending
a subject - procurement - for an IRS value for money study.
7. More general matters, such as the changing
focus of audit, and the preparation of Statements of Internal
Control were discussed. The Committee welcomed ongoing work to
adopt a risk management approach throughout the House service,
which is recognised as NAO 'best practice'. Further work on this,
including the identification of corporate risks, will continue
throughout 2001-02, with the assistance of experts in the field.
8. The Committee has established working
links with the House's external auditor (the National Audit Office),
and looks forward to developing these in the future. The Comptroller
and Auditor General has attended a meeting, and gave members a
briefing on the role and remit of Audit Committees. NAO representatives
have spoken to the Committee about the NAO's future plans for
audit in the House, and a series of further meetings is scheduled
for 2001-02.
9. The Committee is keeping a close eye
on developments in audit, including the recent review of audit
and accountability for central government by Lord Sharman of Redlynch.
It will make recommendations to the Commission as to its future
role and responsibilities as necessary.
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