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Twenty-fourth Annual Report 2001-02
Audit
Committee Annual Report for 2001-02
1. This is the second Annual
Report of the House of Commons Audit Committee, which was established
by the House of Commons Commission on 15 May 2000.
2. The Committee was formed following recommendations in
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. That Review examined, among other
things, the control and direction of the House's audit.
3. The Committee's membership as at 31 March 2002 was:
- The Rt Hon Eric Forth MP (Chairman)
(Mrs Angela Browning MP was Chairman until October 2001);
-
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 are:
-
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 twice in the financial year 2001-02.
The IRS Director attended both its meetings and gave updates on
the work of the Service. Working links with the House's external
auditor (the National Audit Office) have been maintained; each
meeting of the Committee included discussions with National Audit
Office representatives. The Comptroller and Auditor General attended
part of the Committee's March meeting.
6. Discussions with NAO
representatives covered the 2000-01 and 2001-02 accounts and the
changeover to resource accounting. The Committee was also briefed
on the progress of the value for money review of Portcullis House,
which was published on
19 April 2002.
7. The Committee maintained its interest in risk management
during the year, and discussed action being taken by the Board
of Management. Corporate and management risks have now been identified,
and Departmental Risk Sponsors have been appointed.[1]
8. It has also continued to monitor developments in audit,
and considered in some depth the review of audit and accountability
for central government by Lord Sharman of Redlynch (Holding
to Account)[2],
and the Government's reply.[3]
9. The recommendations relating to audit committees
particularly their composition and the need for training
were of particular interest. The Committee is keen to be seen
as leading public sector best practice and made a submission on
these matters to the House of Commons Commission in spring 2002.
The Commission agreed the Committee's recommendation that the
Clerk of the House and Director of Finance and Administration
should cease to be members (although they will attend meetings),
and that a second external member should be nominated. Mr David
Taylor FCA, currently one of the Charity Commissioners, was appointed
to this position on 20 May 2002.
10. During the course of the year, the Committee has also
kept abreast of developing audit arrangements in the devolved
parliamentary bodies and the House of Lords.
11. The Committee considered the new "Definition of Internal
Audit" and "Government Internal Audit Standards", produced by
the Treasury. It commissioned a report from the Internal Review
Service Director on whether the House met the new standards, and
was satisfied with the House service's performance. The Committee
has received a paper by the Internal Review Service Director about
the House's compliance with the Turnbull report. This is generally
positive and will be considered in more detail in 2002-03. In
all these cases the Committee balances the aspiration that the
House should adhere to public sector best practice with its unique
constitutional position.
12. The Internal Review Service supplied the Committee with
an audit of contingency planning, which was critical of some aspects
of the House service's arrangements in this area, particularly
areas of IT back-up. The management response to the report was
constructive, and was welcomed by the Committee.
13. The Committee continues to take a particular interest
in value for money work. It is due to receive a report on procurement,
which was commissioned in the 2000-01 financial year, in June
2002, alongside a response from the Board of Management.
14. A number of possible subjects for value for money review
during 2001-02 were discussed. Members chose two: contract management
(which should usefully supplement the work done on procurement)
and furniture procurement and disposal. Further areas for study
will be identified by the Internal Review Service during 2002-03.
15. The Committee noted that the Internal Review Service
is preparing a business plan.
It will consider this in 2002-03.
1 More Information
on risk management appears in the Board of Management section
of the Commission Annual Report, and the departmental annexes.
Back
2 Holding to Account. The
review of Audit and Accountability for Central Government, February
2001. Back
3 Audit and Accountability
in Central Government: the Government's Response to Lord
Sharman's Report "Holding tp Account", HM Treasury.
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