Public Audit (Wales) Bill [HL]

House of Commons

Session 2003 - 04
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Other Bills before Parliament

Public Audit (Wales) Bill [HL]

Public Audit (Wales) Bill [HL]
Part 1 — Auditor General for Wales
1

[NOTE: The words marked in bold type were inserted by the Lords to avoid
questions of privilege.]
A
Bill
To
Confer further functions on the Auditor General for Wales; to make provision
about the audit of accounts of public bodies in Wales and related matters; to
make provision about economy, efficiency and effectiveness in relation to
public bodies and registered social landlords in Wales; and for connected
purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
Auditor General for Wales
New functions of the Auditor General for Wales
1
Transfer of functions of Assembly
After section 146 of the Government of Wales Act 1998 (c. 38) insert—
5
“146A
Transfer etc of functions of Assembly
(1)
The Assembly may, with the consent of the Auditor General for Wales,
by order provide for any of its supervisory functions in respect of a
public body or a registered social landlord in Wales—
(a)
to be exercised on its behalf by the Auditor General for Wales,
10
or
(b)
to be transferred to the Auditor General for Wales.
(2)
In this section—

“public body” means—
(a)
a body exercising functions of a public nature, or
15
(b)
a body entirely or substantially funded from public
money,

(and for this purpose “body” includes office);

Bill 108 53/3

Public Audit (Wales) Bill [HL]
Part 1 — Auditor General for Wales
2


“registered social landlord in Wales” means a body which is—
(a)
registered as a social landlord under Chapter 1 of Part 1
of the Housing Act 1996, and
(b)
mentioned in any of paragraphs (a) to (c) of section 56(2)
of that Act;
5

“supervisory functions”, in respect of a public body or a registered
social landlord in Wales, means functions of examining,
inspecting, reviewing or studying the financial or other
management of the public body or registered social landlord or
the way in which it discharges any of its functions.
10
(3)
The Assembly may direct the Auditor General for Wales to prepare a
report on his exercise, generally or in respect of a specific body or
matter, of any function transferred to him by an order under subsection
(1)(b).
(4)
The Auditor General for Wales must lay before the Assembly any
15
report prepared by him in accordance with a direction under
subsection (3).
(5)
An order under subsection (1) may contain any appropriate
consequential, incidental, supplementary or transitional provisions or
savings (including provisions in the form of amendments or repeals of
20
enactments).”
2
Additional functions of Auditor General
After section 96 of the Government of Wales Act 1998 (c. 38) insert—
“96A
Reports in public interest
(1)
Where the Auditor General for Wales thinks that it would be in the
25
public interest for him to bring to the public’s attention a matter coming
to his notice in the course of an examination or study to which
subsection (2) applies, he may prepare a report on that matter.
(2)
This subsection applies to—
(a)
an examination of auditable accounts (other than accounts
30
falling to be examined under section 96(3)(a)), and
(b)
an examination or study under section 100, 145 or 145A, except
one undertaken at the request of the body or bodies to which it
relates.
(3)
The Auditor General for Wales must, as soon as practicable after
35
preparing a report under subsection (1), lay the report before the
Assembly.
(4)
In this section “auditable accounts” has the meaning given in section
95(7).
96B
Certification of claims, returns etc.
40
(1)
The Auditor General for Wales must, if so required by a relevant body,
make arrangements for—
(a)
certifying any claim or return in respect of a grant made or
subsidy paid to that body by the Assembly, a Minister of the
Crown or a public authority;
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Public Audit (Wales) Bill [HL]
Part 1 — Auditor General for Wales
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(b)
certifying any account submitted by that body to the Assembly
or a Minister of the Crown with a view to obtaining payment
under a contract between that body and the Assembly or, as the
case may be, the Minister;
(c)
certifying that body’s calculation under paragraph 5(6)(a) of
5
Schedule 8 to the Local Government Finance Act 1988 of the
amount of its non-domestic rating contribution for a financial
year, and for certifying the amount calculated;
(d)
certifying any return by that body which, by or under any
enactment, is required or authorised to be certified by the
10
body’s auditor or under arrangements made by the Auditor
General for Wales.
(2)
In this section—

“public authority” means a body established by or under the
Community Treaties or any enactment; and
15

“relevant body” means—
(a)
a body whose accounts, or statements of accounts, are
“auditable accounts” within the meaning given in
section 95(7), or
(b)
a local government body in Wales (within the meaning
20
given in section 12(1) of the Public Audit (Wales) Act
2004).
96C
Ancillary powers of Auditor General
(1)
Arrangements may be made between the Auditor General for Wales
and a relevant authority—
25
(a)
for any function of that authority to be exercised by, or by a
member of the staff of, the Auditor General for Wales, or
(b)
for administrative, professional or technical services to be
provided by him to that authority or by that authority to him.
(2)
Any arrangements under subsection (1)(a) for the exercise of any
30
function of a relevant authority do not affect the responsibility of the
relevant authority on whose behalf the function is exercised.
(3)
The Auditor General for Wales and—
(a)
a relevant authority,
(b)
a qualified auditor, or
35
(c)
an accountancy body,

may make arrangements to co-operate with, and give assistance to,
each other if each considers that to do so would facilitate, or be
conducive to, the exercise of his or its own functions.
(4)
The Auditor General for Wales may make arrangements under this
40
section on such terms and conditions, including conditions as to
payment, as he thinks fit.
(5)
In this section—

“accountancy body” means—
(a)
a body which is a recognised supervisory body for the
45
purposes of Part 2 of the Companies Act 1989, or
(b)
a body of accountants, established in the United
Kingdom or another EEA State, which is for the time

Public Audit (Wales) Bill [HL]
Part 1 — Auditor General for Wales
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being approved by the Assembly for the purposes of this
section;

“EEA State” means any State which is a Contracting Party to the
Agreement on the European Economic Area signed at Oporto
on 2nd May 1992, as adjusted by the Protocol signed at Brussels
5
on 17th March 1993;

“qualified auditor” means a person eligible to be appointed as an
auditor under section 14 of the Public Audit (Wales) Act 2004
(auditors appointed in respect of local government bodies in
Wales); and
10

“relevant authority” means any government department, any
local or other public authority or the holder of any public
office.”
Accountability of certain public bodies in Wales
3
Studies for improving economy etc in services
15
After section 145 of the Government of Wales Act 1998 (c. 38) insert—
“145A
Studies for improving economy etc in services
(1)
The Auditor General for Wales may undertake or promote studies
designed to enable him to make recommendations for improving
economy, efficiency and effectiveness in the discharge of the functions
20
of any relevant body or bodies.
(2)
The Auditor General for Wales may also undertake or promote other
studies relating to the provision of services by any relevant body or
bodies.
(3)
Subsections (1) and (2) do not entitle the Auditor General for Wales to
25
question the merits of the policy objectives of any relevant body.
(4)
For the purposes of this section each of the following is a “relevant
body”—
(a)
a person who prepares auditable accounts within the meaning
given in section 95(7);
30
(b)
any other person (other than a local government body in Wales)
in relation to whom, by virtue of provision made by or under
this or any other Act, the Auditor General for Wales carries out
examinations or studies relating to the economy, efficiency and
effectiveness with which that person has used his resources in
35
discharging his functions;
(c)
a person (other than a registered social landlord in Wales) in
respect of whom the Auditor General for Wales has functions
by virtue of provision made under section 146A.
(5)
Where the Auditor General for Wales undertakes or promotes a study
40
under this section he may arrange for a report containing—
(a)
the results of the study, and
(b)
his recommendations (if any),

to be laid before the Assembly.
(6)
In this section—
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Public Audit (Wales) Bill [HL]
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“local government body in Wales” has the meaning given in
section 12(1) of the Public Audit (Wales) Act 2004; and

“registered social landlord in Wales” has the meaning given in
section 146A(2).”
4
Studies at request of educational bodies
5
After section 145A of the Government of Wales Act 1998 (c. 38) (inserted by
section 3) insert—
“145B Studies at request of educational bodies
(1)
The Auditor General for Wales may undertake studies designed to
enable him to make recommendations for improving economy,
10
efficiency and effectiveness in the discharge of the functions of a body
specified in the first column of the Table, if requested to do so by the
body (or one of the bodies) specified in relation to it in the second
column of the Table.

Subject of study
Requesting body

15

The governing body of an institution
The governing body or the Higher

in Wales within the higher education
Education Funding Council for

sector.
Wales.

The governing body of an institution
The governing body or the

in Wales receiving financial support
appropriate funding agency.

20

under Part 1 of the Education Act

1994.

The governing body of an institution
The governing body or the National

in Wales within the further education
Council for Education and Training

sector.
for Wales.

25
(2)
Subsection (1) does not entitle the Auditor General for Wales to
question the merits of the policy objectives of a body.
(3)
Where the Auditor General for Wales undertakes a study under
subsection (1) he may, with the consent of the body that requested the
study, arrange for a report containing—
30
(a)
the results of the study, and
(b)
his recommendations (if any),

to be laid before the Assembly.
(4)
The Auditor General for Wales may, at the request of the Higher
Education Funding Council for Wales, give the council advice in
35
connection with the discharge of the council’s functions under section
124B(2)(b) of the Education Reform Act 1988 or paragraph 18(2)(b) of
Schedule 7 to that Act.
(5)
The Auditor General for Wales may, at the request of a higher
education corporation or further education corporation in Wales—
40
(a)
advise them in connection with the appointment of persons to
audit their accounts;

Public Audit (Wales) Bill [HL]
Part 1 — Auditor General for Wales
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(b)
arrange for their accounts for a financial year to be audited by
one or more members of the staff of the Auditor General for
Wales appointed by the corporation.
(6)
In subsection (5)—
(a)
“higher education corporation” and “further education
5
corporation” have the same meaning as in the Further and
Higher Education Act 1992;
(b)
references to the accounts of a higher education corporation
include references to a statement of accounts prepared by the
corporation under section 124B of the Education Reform Act
10
1988 or paragraph 18 of Schedule 7 to that Act.
(7)
This section must be construed as one with the Education Act 1996; and
references in any enactment to the Education Acts include this section.”
5
Studies relating to registered social landlords
After section 145B of the Government of Wales Act 1998 (c. 38) (inserted by
15
section 4) insert—
“145C Studies relating to registered social landlords
(1)
The Assembly and the Auditor General for Wales may agree on one or
more programmes of studies designed to enable the Auditor General
for Wales to make recommendations for improving economy,
20
efficiency and effectiveness in the discharge of the functions of
registered social landlords in Wales.
(2)
If a programme is agreed, the Auditor General for Wales shall ensure
that studies giving effect to the programme are undertaken by him or
on his behalf.
25
(3)
It shall be a term of every such programme that the Assembly make
good to the Auditor General for Wales the full costs incurred by him in
undertaking the programme.
(4)
This section does not entitle the Auditor General for Wales to question
the merits of the policy objectives of a registered social landlord in
30
Wales.
(5)
Where a study is undertaken under this section by the Auditor General
for Wales or on his behalf, he may arrange for a report containing—
(a)
the results of the study, and
(b)
his recommendations (if any),
35

to be laid before the Assembly.
(6)
A person commits an offence if without reasonable excuse he fails to
comply with a requirement imposed under section 95(3)(a) or (b) in
relation to a study under this section.
(7)
A person guilty of an offence under subsection (6) is liable on summary
40
conviction to a fine not exceeding level 3 on the standard scale.
(8)
The Auditor General for Wales may disclose to the Assembly
information obtained by him or a person acting on his behalf in the
course of a study under this section.

Public Audit (Wales) Bill [HL]
Part 1 — Auditor General for Wales
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(9)
“Registered social landlord in Wales” means a body which is—
(a)
registered as a social landlord under Chapter 1 of Part 1 of the
Housing Act 1996, and
(b)
mentioned in any of paragraphs (a) to (c) of section 56(2) of that
Act.”
5
Funding of Auditor General
6
Expenses and accounts
(1)
Section 93 of the Government of Wales Act 1998 (c. 38) (expenses, fees and
accounts) is amended as follows.
(2)
In subsection (1) after “him” insert “or met by virtue of subsection (2A)”.
10
(3)
After subsection (2) insert—
“(2A)
The Auditor General for Wales may borrow sums in sterling by way of
overdraft or otherwise for the purpose of meeting a temporary excess
of expenditure over sums otherwise available to meet that
expenditure.”
15
(4)
After subsection (6) insert—
“(6A)
Nothing in subsection (5) or (6) authorises the Audit Committee—
(a)
to examine that part of any estimate which relates to estimated
income or expenditure of the office of the Auditor General for
Wales relating to Part 2 of the Public Audit (Wales) Act 2004
20
(local government bodies in Wales), or
(b)
to lay an estimate before the Assembly with modifications
relating to such estimated income or expenditure.”
7
Fees
After section 93 of the Government of Wales Act 1998 (the title to which
25
becomes “Expenses and accounts”) insert—
“93A
Fees
(1)
The Auditor General for Wales may charge a fee for auditing a person’s
accounts.
(2)
Where the Auditor General for Wales—
30
(a)
provides services under section 96(3)(b) by carrying out an
examination in relation to a person, or
(b)
at the request of any person other than the Assembly, provides
services under section 145A,

the Auditor General for Wales may charge that person a fee not
35
exceeding the full cost of providing those services.
(3)
Where the Auditor General for Wales—
(a)
provides services to a body under section 96B, or
(b)
provides services at the request of a body under section 145B of
this Act or section 44 of the Public Audit (Wales) Act 2004
40
(studies at request of local government bodies in Wales),