Public Audit (Wales) Bill [HL]

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Session 2003 - 04
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Public Audit (Wales) Bill [HL]

Public Audit (Wales) Bill [HL]
Schedule 1 — Best value audit and inspections
43

Schedules
Schedule 1
Section 50

Best value audit and inspections
1
The Local Government Act 1999 (c. 27) is amended as follows.
2
In section 1 (best value authorities) after subsection (5) insert—
5
“(6)
For the purposes of this Part each of these is a best value authority in
Wales—
(a)
a local authority in Wales;
(b)
a National Park authority for a National Park in Wales;
(c)
a police authority for a police area in Wales;
10
(d)
a fire authority for a combined area in Wales.
(7)
In subsection (6) “local authority in Wales” means a county council,
county borough council or community council in Wales.”
3
After section 2 insert—
“2A Power to extend or disapply: best value authorities in Wales
15
(1)
The National Assembly for Wales may by order provide that any of
the bodies mentioned in subsection (2) is a best value authority in
Wales for the purposes of this Part.
(2)
The bodies are—
(a)
a levying body within the meaning of section 74(1) of the
20
Local Government Finance Act 1988;
(b)
a body to which section 75 of that Act applies (special levies).
(3)
An order under subsection (1) providing for a body to be a best value
authority in Wales may provide for section 7 to have effect in relation
to that body with specified modifications.
25
(4)
The National Assembly for Wales may by order provide that a best
value authority in Wales specified, or of a description specified, in
the order is not to be subject, in relation to such functions as may be
specified, to a duty—
(a)
which is specified in the order, and
30
(b)
to which the authority would otherwise be subject under this
Part.”
4     (1)
Section 4 (performance indicators and standards) is amended as follows.
      (2)
In subsection (4)(b) for “Audit Commission” substitute “relevant audit
authority”.
35

Public Audit (Wales) Bill [HL]
Schedule 1 — Best value audit and inspections
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      (3)
After subsection (5) insert—
“(6)
The relevant audit authority is—
(a)
in relation to best value authorities in Wales, the Auditor
General for Wales;
(b)
in relation to other best value authorities, the Audit
5
Commission.”
5     (1)
Section 7 (audit) is amended as follows.
      (2)
In subsection (3) at the beginning insert “If an authority’s auditor is
appointed by the Audit Commission,” and for “an auditor’s” substitute “the
auditor’s”.
10
      (3)
After subsection (3) insert—
“(3A)
If an authority’s auditor is appointed by the Auditor General for
Wales, sections 18 and 19 of the Public Audit (Wales) Act 2004
(auditor’s rights to documents and information) shall have effect in
relation to the auditor’s functions under this Part as those sections
15
have effect in relation to his functions under Chapter 1 of Part 2 of
that Act.”
      (4)
In subsection (4)(e) at the beginning insert “if the auditor is appointed by the
Audit Commission,”.
      (5)
In subsection (4) after “section 10,” insert—
20
“(ea)
if the auditor is appointed by the Auditor General for Wales,
recommending whether the Auditor General for Wales
should carry out a best value inspection of the authority
under section 10A,”.
      (6)
In subsection (5)(b) at the beginning insert “if the auditor is appointed by the
25
Audit Commission,”.
      (7)
In subsection (5) after “Audit Commission,” insert—
“(ba)
if the auditor is appointed by the Auditor General for Wales,
to the Auditor General for Wales,”.
      (8)
In subsection (7)—
30
(a)
for “reference in subsection (1)” substitute “references in subsections
(1), (3) and (3A)”;
(b)
for “is” substitute “are”;
(c)
for “a reference” substitute “references”.
      (9)
In subsection (8)(a) at the beginning insert “if he was appointed by the Audit
35
Commission,”.
     (10)
In subsection (8) after “Audit Commission Act 1998,” insert—
“(aa)
if he was appointed by the Auditor General for Wales, is no
longer eligible for appointment under section 14 of the Public
Audit (Wales) Act 2004,”.
40
     (11)
In subsection (8) for the words after paragraph (b) substitute “the references
in subsections (1), (3) and (3A) to the authority’s auditor are, in respect of
that financial year, references to the auditor or auditors appointed in
accordance with subsection (8A).”
     (12)
After subsection (8) insert—
45
“(8A)
The auditor or auditors shall be appointed—

Public Audit (Wales) Bill [HL]
Schedule 1 — Best value audit and inspections
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(a)
by the Auditor General for Wales, if the authority is a best
value authority in Wales;
(b)
by the Audit Commission, in any other case.
(8B)
Section 14 of the Public Audit (Wales) Act 2004 shall apply to an
appointment under subsection (8A)(a) as if it were an appointment
5
of a person to audit the authority’s accounts under section 13 of that
Act.”
     (13)
In subsection (9) for “subsection (8)” substitute “subsection (8A)(b)”.
6
Omit section 8(1) (auditor to have regard to code of practice under section 8).
7
After section 8 insert—
10
“8A Code of practice and fees: Auditor General for Wales
(1)
The Auditor General for Wales may prepare, and keep under review,
a code of practice prescribing the way in which auditors appointed
by him are to carry out their functions under section 7.
(2)
Section 16(2) to (9) of the Public Audit (Wales) Act 2004 (code of audit
15
practice) shall have effect in relation to a code of practice under this
section.
(3)
The Auditor General for Wales shall prescribe a scale or scales of fees
in respect of the audit of performance plans which are required to be
audited in accordance with this Part by auditors appointed by him.
20
(4)
Sections 20(4) to (6) and 21(1) to (4) of the Public Audit (Wales) Act
2004 (fees for audit) shall have effect in relation to fees under
subsection (3).
(5)
Before prescribing a scale of fees under subsection (3) the Auditor
General for Wales shall consult—
25
(a)
the Assembly, and
(b)
persons appearing to the Auditor General for Wales to
represent best value authorities in Wales.
8B Auditor’s duty in relation to codes
(1)
An auditor appointed by the Audit Commission who is carrying out
30
an audit of an authority’s performance plan under section 7 shall
have regard to any provisions of a code of practice under section 8
which—
(a)
are applicable to the audit, and
(b)
are in force.
35
(2)
An auditor appointed by the Auditor General for Wales who is
carrying out an audit of an authority’s performance plan under
section 7 shall have regard to any provisions of a code of practice
under section 8A which—
(a)
are applicable to the audit, and
40
(b)
are in force.
(3)
Subsection (4) applies at any time before there are provisions of a
code of practice under section 8A to which an auditor appointed by
the Auditor General for Wales is required under subsection (2) to

Public Audit (Wales) Bill [HL]
Schedule 1 — Best value audit and inspections
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have regard in carrying out an audit of an authority’s performance
plan under section 7.
(4)
The auditor shall have regard to any provisions of a code of practice
under section 8 which—
(a)
are applicable to an audit of a performance plan published by
5
an authority of a corresponding description to the authority,
and
(b)
are in force.”
8
In section 10 (inspections by Audit Commission) after subsection (4) insert—
“(5)
The preceding provisions of this section do not apply in relation to a
10
best value authority in Wales.”
9
After section 10 insert—
“10A Inspections: Auditor General for Wales
(1)
The Auditor General for Wales may carry out an inspection of the
compliance with the requirements of this Part by a best value
15
authority in Wales.
(2)
If the Secretary of State directs the Auditor General for Wales to carry
out an inspection of the compliance with the requirements of this
Part by a specified best value authority in Wales in relation to
specified functions, the Auditor General for Wales shall comply with
20
the direction.
(3)
Before giving a direction under subsection (2) the Secretary of State
shall consult the Auditor General for Wales.
(4)
In carrying out an inspection, and in deciding whether to do so, the
Auditor General for Wales shall have regard to—
25
(a)
any relevant recommendation under section 7(4)(ea), and
(b)
any guidance issued by the Secretary of State.”
10
In section 11 (inspectors’ powers and duties) for subsection (7) substitute—
“(7)
In this section “inspector” means—
(a)
an officer, servant or agent of the Audit Commission carrying
30
out an inspection under section 10;
(b)
the Auditor General for Wales, a member of his staff or a
person providing services to him who is carrying out an
inspection under section 10A.”
11
In section 12 (fees in respect of inspections under section 10), in subsection
35
(4)(b) after “authorities” insert “which may be inspected under section 10”.
12
After section 12 insert—
“12A Fees: inspections under section 10A
(1)
The Auditor General for Wales shall prescribe a scale or scales of fees
in respect of inspections carried out under section 10A.
40
(2)
An authority inspected under section 10A shall, subject to subsection
(3), pay to the Auditor General for Wales the fee applicable to the
inspection in accordance with the appropriate scale.

Public Audit (Wales) Bill [HL]
Schedule 1 — Best value audit and inspections
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(3)
If it appears to the Auditor General for Wales that the work involved
in a particular inspection was substantially more or less than that
envisaged by the appropriate scale, the Auditor General for Wales
may charge a fee which is larger or smaller than that referred to in
subsection (2).
5
(4)
Before prescribing a scale of fees under this section the Auditor
General for Wales shall consult—
(a)
the Secretary of State, and
(b)
persons appearing to the Auditor General for Wales to
represent best value authorities in Wales.”
10
13
After section 13 insert—
“13A Reports of inspections under section 10A
(1)
Where the Auditor General for Wales has carried out an inspection
of an authority under section 10A he shall issue a report.
(2)
A report—
15
(a)
shall mention any matter in respect of which the Auditor
General for Wales believes as a result of an inspection that the
authority is failing to comply with the requirements of this
Part, and
(b)
may, if it mentions a matter under paragraph (a), recommend
20
that the Secretary of State give a direction under section 15.
(3)
The Auditor General for Wales—
(a)
shall send a copy of a report to the authority concerned, and
(b)
may publish a report and any information in respect of a
report.
25
(4)
If a report recommends that the Secretary of State give a direction
under section 15, the Auditor General for Wales shall as soon as
reasonably practicable—
(a)
arrange for the recommendation to be published, and
(b)
send a copy of the report to the Secretary of State.
30
(5)
If a report states that the Auditor General for Wales believes as a
result of an inspection that an authority is failing to comply with the
requirements of this Part, the next performance plan prepared by the
authority under section 6 must record—
(a)
that fact, and
35
(b)
any action taken by the authority as a result of the report.”
14    (1)
Section 23 (regulations about accounts) is amended as follows.
      (2)
In subsection (4) before paragraph (a) insert—
“(za)
if the regulations make provision in relation to best value
authorities in Wales, the Auditor General for Wales,”.
40
      (3)
In subsection (4)(a), at the beginning insert “if the regulations make
provision in relation to other best value authorities,”.
15
In section 25 (coordination of inspections etc.), in subsection (2) after
paragraph (a) insert—
“(aa)
the Auditor General for Wales;”.
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Public Audit (Wales) Bill [HL]
Schedule 2 — Minor and consequential amendments
48

16
In section 26 (guidance issued by Secretary of State), after subsection (3)
insert—
“(3A)
Before issuing guidance under section 10A the Secretary of State
shall, in addition to the consultation required by subsection (2)(c)
above, consult the Auditor General for Wales.”
5
17
In section 33(3) (grants by National Assembly for Wales) after “make grants
to” insert “(a)” and after “this Act” insert “;
(b)
the Auditor General for Wales in respect of expenditure
incurred or to be incurred by him under this Act”.
Schedule 2
10
Section 66

Minor and consequential amendments
Local Government Act 1972 (c. 70)
1     (1)
Section 137 of the Local Government Act 1972 (local authority expenditure
for certain purposes not otherwise authorised) is amended as follows.
      (2)
In subsection (7), omit the words from “and section 14” to the end.
15
      (3)
After that subsection insert—
“(7A)
In relation to England, section 14 of the Audit Commission Act 1998
(rights of inspection) applies in relation to a separate account
included in a local authority’s accounts by virtue of subsection (7)
above as it applies in relation to a statement of accounts prepared by
20
the authority pursuant to regulations under section 27 of that Act.
(7B)
In relation to Wales, section 29 of the Public Audit (Wales) Act 2004
(rights of inspection) applies in relation to a separate account
included in a local authority’s accounts by virtue of subsection (7)
above as it applies in relation to a statement of accounts prepared by
25
the authority pursuant to regulations under section 39 of that Act.”
National Health Service Act 1977 (c. 49)
2
In section 98 of the National Health Service Act 1977 (accounts and audits of
health bodies) after subsection (1C) insert—
“(1D)
The second sentence of subsection (1) does not apply in relation to
30
accounts to which section 61 of the Public Audit (Wales) Act 2004
(accounts of Welsh NHS bodies to be audited by Auditor General for
Wales) applies.”
Local Government, Planning and Land Act 1980 (c. 65)
3
In section 2(7) of the Local Government, Planning and Land Act 1980 (ways
35
in which information may be published), in paragraph (b) after “Audit
Commission Act 1998” insert “or section 39 of the Public Audit (Wales) Act
2004”.

Public Audit (Wales) Bill [HL]
Schedule 2 — Minor and consequential amendments
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Further Education Act 1985 (c. 47)
4
In section 3(4) of the Further Education Act 1985 (accounting provisions:
local education authorities) after “Audit Commission Act 1998” insert “or
section 39 of the Public Audit (Wales) Act 2004”.
Housing Associations Act 1985 (c. 69)
5
5     (1)
Section 75 of the Housing Associations Act 1985 (general functions of
Relevant Authority) is amended as follows.
      (2)
In subsection (1), omit paragraph (f).
      (3)
After subsection (1) insert—
“(1A)
The Housing Corporation also has the general function of providing,
10
on request, to such extent as the Housing Corporation considers
appropriate, advice and assistance to the Audit Commission for
Local Authorities and the National Health Service in England and
Wales in relation to the functions of the Commission mentioned in
subsection (1B).
15
(1B)
The functions referred to in subsection (1A) are the functions of the
Commission under Part 1 of the Local Government Act 1999 (best
value), except to the extent that those functions are exercisable in
relation to best value authorities in Wales (within the meaning given
in that Act).”
20
Local Government Act 1986 (c. 10)
6
In section 5 of the Local Government Act 1986 (separate account of local
authority’s expenditure on publicity), in subsection (4) after “Audit
Commission Act 1998” insert “, section 39(1)(e) of the Public Audit (Wales)
Act 2004”.
25
Airports Act 1986 (c. 31)
7     (1)
The Airports Act 1986 is amended as follows.
      (2)
In section 22(5) (audit of accounts of public airport companies) for the words
from “the Audit Commission” to the end substitute—
“(a)
the Auditor General for Wales, in a case where the
30
company’s controlling authority are—
(i)
a county council or county borough council in Wales,
or
(ii)
a composite authority of which both or all the
constituent councils are county councils or county
35
borough councils in Wales;
(b)
the Audit Commission for Local Authorities and the National
Health Service in England and Wales, in any other case.”.
      (3)
In section 24(3) (inspection of accounts of councils providing services for
public airport companies), in paragraph (a) omit “and Wales” and after that
40
paragraph insert—
“(aa)
in Wales, section 29 of the Public Audit (Wales) Act 2004
(rights of inspection) shall apply in relation to any such
separate account as it applies in relation to any statement of