SIXTH REPORT
The Committee of Public Accounts has agreed to
the following Report:—
REVIEW OF AUDIT AND ACCOUNTABILITY FOR
CENTRAL GOVERNMENT
1. In this report the Committee of Public Accounts
sets out its formal response to the report issued by Lord Sharman
of Redlynch entitled "Holding to Account". That
report records the findings of the Review of Audit and Accountability
Arrangements in Central Government which was announced by the
Chief Secretary to the Treasury to the House on 28 February 2000.[1]
2. The review was set up to address issues raised
in this Committee's Ninth Report of session 1999-2000[2]
on the Government's Resources and Accounts Bill.[3]
It was also charged to consider matters of concern expressed by
government, such as the effect of audit on risk management and
the burden imposed by audit. The review was also invited to consider
appropriate arrangements in the twenty-first century for the audit
and accountability of central government on behalf of Parliament
and the public, and to make recommendations.
3. A Steering Group, consisting of government Ministers
and officials, the Chairman and two Members of this Committee,
as well as representatives from the private sector and the accountancy
profession oversaw the review. Lord Sharman acted as the independent
Chairman of the review's project team.
4. Lord Sharman's report makes recommendations to
build on existing audit and accountability arrangements in central
government. It recommends that, as a matter of principle, the
Comptroller and Auditor General should audit all executive non-departmental
public bodies; that his access rights should be on a statutory
basis; and that, where a department has a substantial stake or
influence or where a company has a public interest role, he should
be eligible for appointment as auditor of companies. The report
recommends that external validation of performance information
for central government should be progressively developed. It also
makes a number of recommendations to bring central government
corporate governance arrangements into line with best practice
in the private sector, to address issues about audit burden and
the effect of audit on risk taking, and to ensure that best use
is made of audit work.
5. The Government gave an undertaking during the
passage of the Government Resources and Accounts Bill to take
any recommendations arising from the review extremely seriously.
It acknowledged that strong, independent audit of public bodies
and public expenditure was in the Government's, as much as Parliament's,
interest.[4]
The Government Resources and Accounts Act 2000 enables the government
to make Orders to provide the Comptroller and Auditor General
with statutory rights of access and to enable his appointment
as auditor on behalf of Parliament to those non-departmental public
bodies currently audited by auditors appointed by Ministers or
the bodies themselves.
6. The Committee's conclusions and recommendations
are:
- We welcome the report's recognition that the
use and safeguarding of public money are key concerns for a democratic
society. We believe the report's recommendations properly reflect
these concerns and provide a comprehensive and complementary set
of measures which, if implemented as a whole, will help to ensure
the continued effectiveness of audit and accountability arrangements
into the twenty-first century.
- We strongly support the report's recommendations
and suggestions. Their implementation will need to be taken forward
by Government, the Comptroller and Auditor General and the National
Audit Office, and Parliament. We believe each must play a full
part in ensuring the report is implemented as a whole.
- We welcome and accept the report's recommendations
on ways in which the Committee of Public Accounts can enhance
its contribution to the accountability process. We intend to explore
the suggestion of the Committee holding an annual hearing to support
consideration of themes across central government. As the report
states, the Committee's programme of work is substantial. We intend,
therefore, to keep our working arrangements under review so as
to take account of developments in departmental responsibilities,
including 'joined up' working and changes in service delivery.
- We support those recommendations in Lord Sharman's
report which are addressed to the Comptroller and Auditor General
and the National Audit Office, which are designed to ensure that
the most is made of their findings, and which provide enhanced
scrutiny of the cost and quality of their work. The Comptroller
and Auditor General has informed the Committee that he accepts
the proposals contained in the report. We welcome his positive
response.
- We urge the Government to play their part by
providing a positive response to the report and by implementing
its recommendations promptly. To this end, we look to the Government
to act swiftly to use the powers available to them in the Government
Resources and Accounts Act to provide the Comptroller and Auditor
General with the statutory rights of access and to enable his
appointment as auditor on behalf of Parliament to those non-departmental
public bodies currently audited by auditors appointed by Ministers
or the bodies themselves. We would further suggest, in order to
provide improved accountability to Parliament, that Government
seek means to extend the compass of the powers now provided to
them by the Act to enable Parliament to have more direct access
to the detail of the Civil List.
1 HC Written Answers 26 February 2000, Column 152W Back
2 Ninth
Report from the Committee of Public Accounts, Session 1999-2000
(HC 159 (1999-2000)) Back
3 Now
the Government Resources and Accounts Act 2000 Back
4 Government
Resources and Accounts Bill, Lords Report Stage, 4 July 2000,
Column 1423 Back
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