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
21

(9)
A body guilty of an offence under subsection (8) is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.
(10)
Nothing in this section affects the operation of section 24(4) to (7).
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Additional publicity for non-immediate reports
(1)
This section applies where under section 22(6) an auditor has sent a report
5
made under section 22(4) to a body.
(2)
The auditor may—
(a)
notify any person that he has made the report;
(b)
publish the report;
(c)
supply a copy of the report or any part of it to any person.
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(3)
From the time when the report is sent to the body—
(a)
the auditor must ensure that any member of the public may—
(i)
inspect the report at all reasonable times without payment;
(ii)
make a copy of the report or any part of it at all reasonable times
without payment;
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(b)
any member of the public may require the body to supply him on
payment of a reasonable sum with a copy of the report or any part of it.
(4)
From the end of the period of one year starting with the day on which the
report is sent to the body, the obligations of the auditor under subsection (3)—
(a)
cease to be his obligations, but
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(b)
become obligations of the Auditor General for Wales instead.
Public inspection etc and action by auditor
29
Inspection of statements of accounts and auditors’ reports
(1)
A local government elector for the area of a local government body in Wales
may—
25
(a)
at all reasonable times and without payment inspect and make a copy
of any statement of accounts prepared by the body under regulations
made under section 39;
(b)
at all reasonable times and without payment inspect and make a copy
of any report (other than a report under section 22(3)) made to the body
30
by an auditor;
(c)
require a copy of a statement or report falling within paragraph (a) or
(b) to be delivered to him on payment of a reasonable sum for each
copy.
(2)
A person who has custody of a document falling within paragraph (a) or (b) of
35
subsection (1) commits an offence if—
(a)
he obstructs a person in the exercise of a right under this section to
inspect or make a copy of the document, or
(b)
he refuses to supply a copy of the document to a person entitled to the
copy under subsection (1)(c).
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(3)
A person guilty of an offence under subsection (2) is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
22

(4)
In this section references to a copy of a document include a copy of any part of
it.
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Inspection of documents and questions at audit
(1)
At an audit of accounts under this Chapter an interested person may—
(a)
inspect the accounts to be audited and all books, deeds, contracts, bills,
5
vouchers and receipts relating to them;
(b)
make a copy of all or any part of the accounts and of any of the other
documents mentioned in paragraph (a).
(2)
At the request of a local government elector for any area to which accounts to
be audited under this Chapter relate, the auditor of those accounts must give
10
the elector or any representative of his an opportunity to question the auditor
about the accounts.
(3)
But nothing in this section entitles a person—
(a)
to inspect any accounts or other document relating to a body to the
extent that the accounts contain, or the document contains, personal
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information;
(b)
to require any personal information to be disclosed by a body’s auditor
in answer to any question.
(4)
In subsection (3) “personal information” means information relating to an
individual which is available to the body for reasons connected with either of
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these—
(a)
the fact that the individual holds or has held an office or employment
under the body;
(b)
the fact that payments or other benefits are or have been made or
provided to the individual by the body in respect of an office or
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employment under another person.
(5)
For the purposes of subsection (4) payments made or benefits provided to an
individual in respect of an office or employment include any payment made or
benefit provided to an individual in respect of his ceasing to hold the office or
employment.
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Right to make objections at audit
(1)
At an audit of accounts under this Chapter a local government elector for the
area to which the accounts relate, or any representative of his, may make
objections before the auditor as to—
(a)
any matter in respect of which the auditor has a power to apply for a
35
declaration under section 32;
(b)
any other matter in respect of which the auditor has the power to make
a report under section 22.
(2)
A local government elector proposing to make an objection under subsection
(1) must—
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(a)
give written notice to the auditor of the proposed objection and the
grounds on which it is to be made, and
(b)
at the same time, send a copy of the notice to the body whose accounts
are being audited.

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
23

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Declaration that item of account is unlawful
(1)
Where it appears to an auditor carrying out an audit under this Chapter that
an item of account is contrary to law, the auditor may apply to the court for a
declaration that the item is contrary to law.
(2)
On an application under this section the court may make or refuse to make the
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declaration applied for.
(3)
If the court makes the declaration applied for it may also order rectification of
the accounts.
(4)
If an auditor decides not to make an application for a declaration under this
section in relation to an item of account, he must notify a person who has made
10
an objection under section 31(1)(a) in relation to the item of account of his
decision.
(5)
Subsection (4) does not apply if the person who has made the objection has
failed to comply with section 31(2).
(6)
A person notified under subsection (4) of an auditor’s decision may require the
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auditor to state in writing the reasons for his decision before the end of the
permitted period, which is 14 days starting with the day on which the person
is notified of the auditor’s decision.
(7)
A person who receives reasons for an auditor’s decision under subsection (6)
may appeal to the court against the decision before the end of the permitted
20
period, which is 28 days starting with the day on which he receives the reasons.
(8)
On an appeal under subsection (7) the court has the same powers in relation to
the item of account as it would have if the auditor had applied to the court for
a declaration under subsection (1) in relation to the item of account.
(9)
On an application or appeal under this section relating to the accounts of a
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body, the court may make such order as it thinks fit for the payment by the
body of expenses incurred in connection with the application or appeal by—
(a)
the auditor;
(b)
the person by whom the appeal is brought.
(10)
The High Court and the county courts have jurisdiction for the purposes of this
30
section.
Prevention of unlawful expenditure etc
33
Advisory notices
(1)
An auditor of accounts of a local government body in Wales may issue a notice
under this section (an “advisory notice”) if he has reason to believe that one or
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more of the requirements specified in subsection (2) is met.
(2)
The requirements are that—
(a)
the body or an officer of the body is about to make or has made a
decision which involves or would involve the body incurring
expenditure which is unlawful;
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(b)
the body or an officer of the body is about to take or has begun to take
a course of action which, if pursued to its conclusion, would be
unlawful and likely to cause a loss or deficiency;

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
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(c)
the body or an officer of the body is about to enter an item of account,
the entry of which is unlawful.
(3)
For the purposes of this section and section 34 the actions of any of these are to
be treated as the actions of a body—
(a)
a committee or sub-committee of the body;
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(b)
a person (other than an officer of the body) authorised to act on behalf
of the body.
(4)
An advisory notice is a notice which meets these requirements—
(a)
it is addressed to the body or officer;
(b)
it specifies which of the requirements specified in subsection (2) is met
10
and the decision, course of action or item of account to which the notice
relates;
(c)
it specifies that the notice will take effect on the day a copy of it is served
on the person to whom it is addressed;
(d)
it requires the body or officer to give the auditor of the body’s accounts
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not less than the specified period of notice in writing of the intention of
the body or officer to—
(i)
make or implement the decision to which the notice relates,
(ii)
take or continue to take the course of action to which the notice
relates, or
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(iii)
enter the item of account to which the notice relates.
(5)
For the purposes of subsection (4)(d) the specified period of notice is the period
(not exceeding 21 days) specified in the advisory notice.
(6)
A copy of an advisory notice—
(a)
must be served on the body to which, or to an officer of which, it is
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addressed;
(b)
if the notice is addressed to an officer, must be served on him;
(c)
may be served on any other person considered appropriate by the
auditor by whom the notice is issued.
(7)
The auditor by whom an advisory notice is issued must before the end of the
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required period serve a statement of his reasons for the belief referred to in
subsection (1) on—
(a)
the body, and
(b)
if the advisory notice is addressed to an officer of the body, the officer.
(8)
The required period for the purposes of subsection (7) is 7 days starting on the
35
day on which a copy of the advisory notice was served on the person to whom
it is addressed.
(9)
A document to be served on an officer of a body under this section must be
served on him by addressing it to him and—
(a)
delivering it to him at an office of the body at which he is employed,
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(b)
leaving it at such an office, or
(c)
sending it by post to such an office.
(10)
An advisory notice may at any time be withdrawn by the person who for the
time being is the auditor of the body to which, or to an officer of which, the
notice was addressed.
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Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
25

(11)
The auditor by whom an advisory notice is withdrawn must give notice in
writing of the withdrawal to any body or person on whom a copy of the
advisory notice was served under subsection (6).
(12)
If two or more auditors are appointed in relation to a body’s accounts an
advisory notice may be issued or withdrawn by the auditors acting jointly or
5
by one of the auditors determined by them.
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Effect of an advisory notice
(1)
Subsections (2) to (4) apply while an advisory notice has effect.
(2)
If the advisory notice relates to a decision, it is not lawful for the body
concerned or an officer of the body to make or implement the decision unless
10
and until the conditions set out in subsection (5) are met.
(3)
If the advisory notice relates to a course of action, it is not lawful for the body
concerned or an officer of the body to take or continue to take the course of
action unless and until the conditions set out in subsection (5) are met.
(4)
If the advisory notice relates to an item of account, it is not lawful for the body
15
concerned or an officer of the body to enter the item of account unless and until
the conditions set out in subsection (5) are met.
(5)
The conditions are—
(a)
that the body has considered, in the light of the advisory notice and the
statement under section 33(7), the consequences of doing the thing
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mentioned in whichever of subsections (2) to (4) is applicable;
(b)
that the body or officer has given the person who is for the time being
the auditor of the body’s accounts the period of notice in writing
required by the advisory notice under section 33(4)(d);
(c)
that that period has expired.
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(6)
An advisory notice takes effect on the day on which a copy of the notice is
served on the person to whom it is addressed.
(7)
An advisory notice ceases to have effect—
(a)
if a statement of reasons is not served in accordance with section 33(7),
at the end of the period specified in section 33(8);
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(b)
in any other case, when it is withdrawn under section 33(10).
(8)
An auditor may recover from the body concerned any expenses reasonably
incurred by him in or in connection with the issue of an advisory notice.
(9)
In this section “the body concerned”, in relation to an advisory notice, means
the body to which, or to an officer of which, the notice is addressed.
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35
Advisory notices: legal actions
(1)
Subsection (2) applies if—
(a)
before an advisory notice is served, a body enters into a contract to
dispose of or acquire an interest in land, and
(b)
before the disposal or acquisition is completed, an advisory notice takes
40
effect as a result of which it is unlawful for the body to complete the
disposal or acquisition.

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
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(2)
The existence of the advisory notice does not prejudice any remedy in damages
which may be available to any person as a result of the body’s failure to
complete the contract.
(3)
No action lies against an auditor in respect of loss or damage alleged to have
been caused as a result of the issue of an advisory notice which was issued in
5
good faith.
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Power of auditor to make a claim for judicial review
(1)
An auditor appointed to audit accounts of a local government body in Wales
may make a claim for judicial review with respect to a decision of the body or
a failure of the body to act, if it is reasonable to believe that the decision or
10
failure to act would have an effect on the body’s accounts.
(2)
Subsection (1) is subject to section 31(3) of the Supreme Court Act 1981 (c. 54)
(no claim for judicial review without permission of court).
(3)
The existence of the powers conferred on an auditor under this Part is not a
ground for refusing—
15
(a)
a claim falling within subsection (1), or
(b)
an application for permission to make a claim falling within subsection
(1).
(4)
On a claim by an auditor for judicial review with respect to a decision of a body
or a failure of a body to act, the court may make any order it thinks fit for the
20
payment by the body of expenses incurred by the auditor in connection with
the claim.
Miscellaneous
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Extraordinary audit
(1)
The Auditor General for Wales may direct an auditor to hold an extraordinary
25
audit of the accounts of a local government body in Wales if the condition in
subsection (2) or the condition in subsection (3) is met.
(2)
The condition is that it appears to the Auditor General for Wales to be desirable
to hold an extraordinary audit of the body’s accounts.
(3)
The condition is that an application for an extraordinary audit of the body’s
30
accounts is made by a local government elector for the area of the body.
(4)
The Assembly may require the Auditor General for Wales to direct an auditor
to hold an extraordinary audit of the accounts of a local government body in
Wales if it appears to the Assembly to be desirable in the public interest for an
extraordinary audit of the body’s accounts to be held.
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(5)
These provisions apply to an extraordinary audit under this section as they
apply to an ordinary audit under this Chapter—
(a)
section 15;
(b)
sections 17 to 19;
(c)
sections 22 to 28;
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(d)
sections 31 and 32.

Public Audit (Wales) Bill [HL]
Part 2 — Local government bodies in Wales
Chapter 1 — Accounts and audit
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(6)
An extraordinary audit of a body’s accounts may be held under this section
only if 3 clear days’ notice in writing of the audit is given to the body.
(7)
The expenditure incurred in holding an extraordinary audit of a body’s
accounts under this section must be met in the first instance by the Auditor
General for Wales.
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(8)
The Auditor General for Wales may recover all or part of the expenditure from
the body.
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Audit of accounts of officers
(1)
This section applies if an officer of a local government body in Wales receives
money or other property—
10
(a)
on behalf of the body, or
(b)
for which he ought to account to the body.
(2)
The auditor of the body’s accounts must audit the officer’s accounts.
(3)
These provisions apply with the necessary modifications to the accounts and
audit—
15
(a)
section 13(1);
(b)
sections 17 to 24;
(c)
sections 27 to 32;
(d)
section 37;
(e)
section 39.
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39
Accounts and audit regulations
(1)
The Assembly may by regulations applying to local government bodies in
Wales make provision with respect to—
(a)
the keeping of accounts;
(b)
the form, preparation and certification of accounts and of statements of
25
accounts;
(c)
the deposit of the accounts of a body at the offices of the body or at
another place;
(d)
the publication of information relating to accounts and the publication
of statements of accounts;
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(e)
the exercise of any rights of objection or inspection conferred by section
29, 30 or 31 and the steps to be taken by a body for informing local
government electors for the area of the body of those rights.
(2)
Before making any regulations under this section the Assembly must consult—
(a)
the Auditor General for Wales,
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(b)
any associations of local authorities in Wales which appear to it to be
concerned, and
(c)
any bodies of accountants which appear to it to be appropriate.
(3)
A person commits an offence if—
(a)
without reasonable excuse he contravenes a provision of regulations
40
under this section, and
(b)
the regulations declare that contravention of the provision is an offence.