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 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
14

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General duties of auditors
(1)
This section applies in relation to the audit of a body’s accounts under this
Chapter.
(2)
An auditor must, by examination of the accounts and otherwise, satisfy himself
of these things—
5
(a)
that the accounts are prepared in accordance with regulations under
section 39;
(b)
that they comply with the requirements of all other statutory
provisions applicable to the accounts;
(c)
that proper practices have been observed in the compilation of the
10
accounts;
(d)
that the body has made proper arrangements for securing economy,
efficiency and effectiveness in its use of resources;
(e)
that the body, if required to publish information in pursuance of a
direction under section 47 (performance information) has made such
15
arrangements for collecting and recording the information and for
publishing it as are required for the performance of its duties under that
section.
(3)
An auditor must comply with any provisions of a code of audit practice issued
under section 16 which—
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(a)
are applicable to the audit of the accounts being audited, and
(b)
are in force.
(4)
At any time before there are provisions of a code of audit practice with which
an auditor is required to comply under subsection (3), the auditor must comply
with any provisions of a code of audit practice issued under section 4 of the
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Audit Commission Act 1998 (c. 18) which—
(a)
are applicable to the audit under that Act of the accounts of bodies of a
corresponding description to the body, and
(b)
are in force.
18
Auditors’ rights to documents and information
30
(1)
An auditor has a right of access at all reasonable times to every document
relating to a local government body in Wales which appears to him necessary
for the purposes of his functions under this Chapter.
(2)
The documents relating to a body to which the right conferred by subsection
(1) applies may include in particular—
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(a)
a document which is held or controlled by a person who has received
financial assistance from the body by means of a grant, loan or
guarantee or as a result of the taking of an interest in any property or
body corporate;
(b)
a document which is held or controlled by a person who has supplied
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goods or services to the body in pursuance of a contract to which the
body was party or who has supplied goods or services in pursuance of
a relevant sub-contract;
(c)
a document of a description specified in an order made by the
Assembly.
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Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
15

(3)
For the purposes of subsection (2)(b) a contract is a relevant sub-contract if its
performance fulfils, or contributes to the fulfilment of, an obligation to supply
goods or services to the body in another contract.
(4)
An auditor may require a person whom he thinks has information of the kind
mentioned in subsection (5)—
5
(a)
to give him any assistance, information and explanation which the
auditor thinks necessary for the purposes of his functions under this
Chapter;
(b)
to attend before him in person to—
(i)
give the assistance, information or explanation, or
10
(ii)
produce any document which is held or controlled by the
person and to which the right conferred by subsection (1)
applies.
(5)
The information is information which relates to—
(a)
a local government body in Wales in relation to which the auditor has
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functions under this Chapter;
(b)
a document to which the right conferred by subsection (1) applies;
(c)
a person who holds or controls such a document.
(6)
Every local government body in Wales must provide an auditor with every
facility and all information which he may reasonably need for the purposes of
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his functions under this Chapter.
(7)
Before making an order under subsection (2)(c) the Assembly must consult—
(a)
the Auditor General for Wales, and
(b)
any associations of local authorities in Wales which appear to it to be
concerned.
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19
Auditors’ rights to documents and information: offences
(1)
A person commits an offence if without reasonable excuse he fails to comply
with a requirement imposed by an auditor under section 18(4).
(2)
A person guilty of an offence under subsection (1) is liable on summary
conviction—
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(a)
to a fine not exceeding level 3 on the standard scale, and
(b)
to an additional fine not exceeding £20 for each day on which the
offence continues after he has been convicted of it.
(3)
Subsection (4) applies if—
(a)
a person is convicted of an offence under subsection (1), and
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(b)
expenses are incurred by an auditor in connection with proceedings for
the offence.
(4)
The expenses may be recovered from the convicted person or an appropriate
person, to the extent that they are not recovered from any other source.
(5)
An appropriate person is a person who controlled the document referred to in
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section 18(5) at the time the requirement was imposed.

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
16

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Fees for audit
(1)
The Auditor General for Wales must prescribe a scale or scales of fees payable
for one or more financial years in respect of the audit of accounts of local
government bodies in Wales under this Chapter.
(2)
Before prescribing a scale of fees under subsection (1) the Auditor General for
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Wales must consult—
(a)
any associations of local authorities in Wales which appear to the
Auditor General for Wales to be concerned, and
(b)
any bodies of accountants which appear to the Auditor General for
Wales to be appropriate.
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(3)
In prescribing a scale of fees under subsection (1) for a financial year the
Auditor General for Wales may take account of the expenses he expects to
incur in the financial year in undertaking or promoting studies under sections
41 and 42.
(4)
A local government body in Wales must, subject to subsection (5), pay to the
15
Auditor General for Wales the fee payable in respect of the audit in accordance
with the appropriate scale.
(5)
If it appears to the Auditor General for Wales that the work involved in a
particular audit differed substantially from that envisaged by him when
prescribing the appropriate scale, the Auditor General for Wales may charge a
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fee which differs from that referred to in subsection (4).
(6)
The fee payable in respect of an audit under this Chapter is the same whether
or not the auditor is a member of the staff of the Auditor General for Wales.
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Fees prescribed by Assembly
(1)
The Assembly may, if it considers it necessary or desirable to do so, prescribe
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by regulations a scale or scales of fees to have effect in place of a scale or scales
prescribed by the Auditor General for Wales under section 20(1).
(2)
A scale of fees prescribed under subsection (1) has effect for the period
specified in relation to it in the regulations.
(3)
Subsection (4) applies if—
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(a)
a scale of fees is prescribed under subsection (1) in place of a scale
prescribed by the Auditor General for Wales, and
(b)
the scale prescribed by the Auditor General for Wales would otherwise
be the appropriate scale for the purposes of section 20(4) and (5).
(4)
The references to the appropriate scale in section 20(4) and (5) are to be read as
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references to the appropriate scale prescribed under subsection (1) of this
section.
(5)
Before making regulations under subsection (1) the Assembly must consult—
(a)
the Auditor General for Wales,
(b)
any associations of local authorities in Wales which appear to it to be
40
concerned, and
(c)
any bodies of accountants which appear to it to be appropriate.

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
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Auditors’ reports and recommendations
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Immediate and other reports in public interest
(1)
In auditing accounts of a body under this Chapter, an auditor must consider
whether, in the public interest, he should make a report on any matter which
comes to his notice in the course of the audit, in order for it to be—
5
(a)
considered by the body, or
(b)
brought to the attention of the public.
(2)
If the auditor considers that, in the public interest, he should make a report
such as is mentioned in subsection (1), he must consider whether the public
interest requires the matter to be made the subject of an immediate report.
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(3)
If the auditor considers that the public interest requires the matter to be made
the subject of an immediate report, he must make the report immediately.
(4)
If the auditor considers that the public interest does not require the matter to
be made the subject of an immediate report, he must make the report at the
conclusion of the audit.
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(5)
In a case within subsection (3), the auditor must send the report to the body,
and a copy of the report to the Auditor General for Wales, immediately after
making it.
(6)
In a case within subsection (4), the auditor must send the report to the body,
and a copy of the report to the Auditor General for Wales, before the end of the
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period of 14 days starting with the day on which he concludes the audit.
23
General report
(1)
This section applies if an auditor has concluded his audit of a body’s accounts
under this Chapter.
(2)
If a statement of accounts is required to be prepared by regulations under
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section 39, the auditor must enter on the statement—
(a)
a certificate that he has completed the audit in accordance with this
Chapter, and
(b)
his opinion on the statement.
(3)
In any other case, the auditor must enter on the accounts—
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(a)
a certificate that he has completed the audit in accordance with this
Chapter, and
(b)
his opinion on the accounts.
(4)
But if an auditor makes a report under section 22 at the conclusion of the audit,
he may include the certificate and opinion referred to in subsections (2) and (3)
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in the report instead of making an entry on the statement or accounts.
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Consideration of reports in public interest
(1)
This section applies if an auditor makes a report under section 22 on a matter
which comes to his notice in the course of the audit of the accounts of a body.
(2)
The body must take the report into consideration—
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Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
18

(a)
as soon as practicable after receiving it, if the body is a body mentioned
in subsection (3);
(b)
in accordance with section 25, in any other case.
(3)
The bodies referred to in subsection (2)(a) are—
(a)
a port health authority;
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(b)
a conservation board;
(c)
an internal drainage board;
(d)
a local probation board.
(4)
The agenda supplied to members of the body for the meeting of the body at
which the report is to be considered must be accompanied by the report.
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(5)
Subsection (6) applies to these powers—
(a)
the power under section 1(4)(b) of the Public Bodies (Admission to
Meetings) Act 1960 (c. 67) to exclude items from the matter supplied
under that section (supply of agenda etc. to newspapers);
(b)
the power under section 100B(2) of the Local Government Act 1972
15
(c. 70) to—
(i)
exclude documents from the documents open to inspection
under section 100B(1) of that Act, or
(ii)
exclude items from the matter supplied under section 100B(7) of
that Act (public access to agenda and reports before meetings
20
and supply of agenda etc. to newspapers).
(6)
The powers mentioned in subsection (5) do not include power to exclude the
report.
(7)
Part 5A of the Local Government Act 1972 has effect in relation to the report as
if section 100C(1)(d) of that Act (public access to copies of reports for 6 years
25
after meeting) were not limited to so much of the report as relates to an item
during which the meeting was open to the public.
25
Procedure for consideration of reports and recommendations
(1)
This section applies if a body is required under section 24(2)(b) to take a report
into consideration in accordance with this section.
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(2)
This section also applies if an auditor of any accounts of a local government
body in Wales—
(a)
sends to the body a written recommendation, and
(b)
states in the document containing the recommendation that in his
opinion the recommendation should be considered in accordance with
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this section.
(3)
But subsection (2) does not apply if the body is—
(a)
a port health authority;
(b)
a conservation board;
(c)
an internal drainage board;
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(d)
a local probation board.
(4)
If this section applies, the body must consider the report or recommendation at
a meeting held by it before the end of the period of one month starting with the
day on which the auditor sends the report or recommendation to it.

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
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(5)
At the meeting the body must decide—
(a)
if a report under section 22 is considered at the meeting, whether the
report requires it to take any action;
(b)
if a recommendation within subsection (2) is considered at the meeting,
whether the recommendation is to be accepted;
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(c)
what action (if any) to take in response to the report or
recommendation.
(6)
An auditor may extend the period of one month mentioned in subsection (4) in
relation to a report or recommendation if he is satisfied that it is reasonable to
allow the body more time to comply with its duties under subsections (4) and
10
(5) in relation to the report or recommendation.
(7)
A period may be extended under subsection (6) more than once.
(8)
Nothing in section 101 of the Local Government Act 1972 (c. 70) (delegation of
functions) applies to a duty imposed on a body by this section.
(9)
This section does not affect any duties (so far as they relate to the subject-matter
15
of a report or recommendation) imposed by or under—
(a)
this Act;
(b)
sections 114 to 116 of the Local Government Finance Act 1988 (c. 41)
(reports by chief finance officers);
(c)
section 5 of the Local Government and Housing Act 1989 (c. 42)
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(functions of monitoring officers);
(d)
any other enactment.
26
Publicity for meetings under section 25
(1)
This section applies if a body is required under section 25(4) to hold a meeting.
(2)
The meeting may be held on a particular day only if, at least seven clear days
25
before that day, a notice complying with subsection (3) has been published in
a newspaper circulating in the area of the body.
(3)
A notice complies with this subsection if it—
(a)
states the time and place of the meeting,
(b)
indicates that the meeting is to be held to consider an auditor’s report
30
or recommendation (as the case may be), and
(c)
describes the subject-matter of the report or recommendation.
(4)
As soon as practicable after the meeting the body must—
(a)
ensure that the auditor is notified of the decisions made by the body
under section 25(5),
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(b)
obtain the approval of the auditor to a written summary of those
decisions (“the approved summary”), and
(c)
ensure that a notice containing the approved summary is published in
one or more newspapers circulating in the area of the body.
(5)
The approved summary need not summarise any decision made at the meeting
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while the public were excluded—
(a)
under section 100A(2) of the Local Government Act 1972 (confidential
information);
(b)
in pursuance of a resolution under section 100A(4) of that Act (exempt
information);
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Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
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(c)
in pursuance of a resolution under section 1(2) of the Public Bodies
(Admission to Meetings) Act 1960 (c. 67) (protection of public interest).
(6)
But if sections 100C and 100D of the Local Government Act 1972 (availability
for inspection after meeting of minutes, background papers and other
documents) apply in relation to the meeting the approved summary must
5
indicate the documents in relation to the meeting which are open for inspection
under those sections.
(7)
This section does not affect any provisions made in relation to meetings of a
body by section 24(4) to (7) or by or under—
(a)
the Local Government Act 1972 (c. 70);
10
(b)
the Public Bodies (Admission to Meetings) Act 1960 (c. 67);
(c)
any other enactment.
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Additional publicity for immediate reports
(1)
This section applies where under section 22(5) an auditor has sent a report
made under section 22(3) to a body.
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(2)
From the time when the report is received by the body any member of the
public may—
(a)
inspect the report at all reasonable times without payment;
(b)
make a copy of the report or any part of it at all reasonable times
without payment;
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(c)
require the body to supply him on payment of a reasonable sum with a
copy of the report or any part of it.
(3)
On receiving a report sent to it under section 22(5) a body must immediately—
(a)
ensure that a notice is published in one or more newspapers circulating
in the area of the body, and
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(b)
supply a copy of the report to every member of the body.
(4)
The notice published under subsection (3) must—
(a)
identify the subject-matter of the report, and
(b)
state that any member of the public may inspect the report and make a
copy of it or any part of it between such times and at such place or
30
places as are specified in the notice.
(5)
An auditor who has made a report under section 22(3) may—
(a)
notify any person that he has made the report;
(b)
supply a copy of the report or of any part of it to any person.
(6)
A person who has custody of a report made under section 22(3) commits an
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offence if—
(a)
he obstructs a person in the exercise of a right conferred by subsection
(2)(a) or (b), or
(b)
he refuses to comply with a requirement under subsection (2)(c).
(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)
A body commits an offence if it fails to comply with a requirement of
subsection (3).