|Public Audit (Wales) [HL] Bill - continued||House of Commons|
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Clause 42: Studies on impact of statutory provisions, etc
91. This clause requires the Auditor General to undertake or promote studies to identify and assess the impact of statutory provisions, or directions or guidance made by the Assembly, on the economy, efficiency and effectiveness in the discharge of the functions of local government bodies in Wales. Before undertaking such studies the Auditor General must consult with the same associations as those referred to above in relation to clause 41. The Auditor General is required to lay reports resulting from such studies before the Assembly where he thinks that a matter should be drawn to the attention of the Assembly. There is also a requirement for the Auditor General and the Assembly (in practice, the Assembly Social Services Inspectorate Wales) to co-operate in relation to studies under this clause or under section 95(2) of the Health and Social Care (Community Health and Standards) Act 2003. Section 95(2) of that Act gives the Assembly functions to carry out studies, in respect of local authority social services functions in Wales, of a kind similar to those which the Auditor General can carry out under clause 42 of this Bill. The duty of co-operation is, thus, intended to minimise the practical impact of the regulatory regime on the work of local authority social services departments.
Clause 43: Co-operation with Audit Commission
92. This clause imposes a duty on the Auditor General to co-operate with the Audit Commission where it seems appropriate for the efficient and effective discharge of his functions under clauses 41 and 42. This duty is consistent with that imposed on the Auditor General in respect of the Assembly, the Audit Commission and CHAI, in relation to health functions, by clause 62. A complementary duty is imposed on the Audit Commission by Schedule 2 to the Bill. Further mutual duties on the Auditor General and the Audit Commission to co-operate, by exchanging information to facilitate each of them in making cross-border comparisons when carrying out studies under clauses 41 and 42 (in the case of the Auditor General) and sections 33 and 34 of the Audit Commission Act (in the case of the Audit Commission), are imposed in clause 57 and Schedule 2, respectively.
Clause 44: Studies at request of local government bodies in Wales
93. This clause enables the Auditor General, at the request of a local government body in Wales, to undertake or promote studies designed to enable the Auditor General to make recommendations for improving the economy, efficiency and effectiveness in the discharge of the functions of that body. Before making a request to the Auditor General the body must consult appropriate associations of employees. The Auditor General must charge the body a fee that recovers the full cost to him of providing the services (by virtue of the new section 96A(4) of GOWA: see the note on clause 7 above).
94. Similarly, in relation to health bodies, the Auditor General can carry out studies on request for improving economy, efficiency and effectiveness, under section 96(3)(b) of GOWA provided that the Assembly or a Minister of the Crown agrees.
Clause 45: Benefit administration studies for Secretary of State
95. This clause enables the Auditor General, at the request of the Secretary of State, to conduct or assist the Secretary of State to conduct a study designed to improve economy, efficiency and effectiveness and quality of performance in administration of housing benefit or council tax benefit functions by one or more local authorities in Wales (as defined in clause 59(5)). The Auditor General can only conduct such a study if the Secretary of State agrees to pay the Auditor General a reasonable fee in respect of the study.
96. The Auditor General has, for the purposes of carrying out such studies, all the rights of access to documents and information etc. set out in clause 52. The report resulting from the study must be sent to the Secretary of State, and the Secretary of State may publish the report if he chooses, in conjunction with the Auditor General. It was not considered appropriate to place the Secretary of State under a duty to publish the report. The report may for instance include information that might be helpful to fraudsters in highlighting a weakness in the benefits system. It may contain confidential information or identity of individuals. For these reasons a blanket requirement to publish a report would be inadvisable.
Clause 46: Performance standards: relevant bodies
97. This clause specifies which local government bodies in Wales are required to comply with the provisions set out in clauses 47 to 49. These are: a county council or county borough council in Wales; a committee or joint committee of a county council or county borough council in Wales; a National Park authority in Wales; a fire authority in Wales; and a police authority in Wales. The Assembly may by order extend the application of clauses 47 to 49 to other local government bodies in Wales (as defined in clause 12).
Clause 47: Publication of information as to standards of performance
98. This clause requires the Auditor General to give directions to relevant local government bodies in Wales, specified in (or in an order made under) clause 46, as to the information they should publish so as to facilitate comparisons:-
The comparisons must be made by reference to the criteria of cost, economy, efficiency and effectiveness.
99. Provision is also made for the collection, recording, accuracy, completeness, retention and publication of the relevant information. The information must be published in accordance with the direction given, by a method permitted under clause 48 and not later than 9 months after the end of the financial year in question. The clause also makes provision for the local government electors for the area of the relevant body to inspect and make copies (free of charge) of documents containing the published information, or to require copies to be sent to them (on payment of a reasonable charge). A person who has custody of a document kept available for inspection commits an offence if he obstructs the rights of electors in this regard or refuses to comply with a requirement to supply copies.
Clause 48: Permitted methods of publishing information under section 47
100. This clause sets out the ways in which information required by a direction made under clause 47 is permitted to be published. The local government body is free (in accordance with its own powers) to publish the information in other forms in addition to the specified methods, such as publication on its internet site. But it must use at least one of the permitted methods as a minimum.
Clause 49: Directions under section 47
101. This clause sets out the requirements relating to the content, making and publication of a direction under clause 47. A direction imposing a new requirement on a relevant body must be the subject of consultation by the Auditor General with any associations of relevant bodies and other persons that the Auditor General thinks fit, and must be given no later than 31 December in the financial year preceding the financial year in relation to which the information is to be published (e.g. 31 December 2005 in respect of information relating to the 2006-07 financial year).
102. The Auditor General must publish any directions he gives in a way designed to bring it to the attention of members of the public, as well as sending a copy to all bodies to which the direction relates.
PART 2, CHAPTER 3: BEST VALUE
Clause 50: Best value audit and inspections
103. This clause, in conjunction with Schedule 1 to the Bill, makes amendments, in respect of specified local government bodies in Wales, to the best value regime created by Part 1 of the Local Government Act 1999 ("the 1999 Act"). Essentially, Schedule 1 provides, first, that the auditor responsible for the audit of best value performance plans in Wales is the auditor appointed by the Auditor General; and, second, that responsibility for best value compliance inspections, now carried out by the Audit Commission under s. 10 of the 1999 Act, passes, in Wales, to the Auditor General.
104. Best value performance plans are known as "improvement plans" in Wales where they are required to be prepared by Welsh county councils, county borough councils, community councils and National Parks authorities (but not by police or fire authorities in Wales): see The Local Government (Whole Authority Analyses and Improvement Plans) (Wales) Order 2002 (SI 2002/886) (W. 101). Likewise, in Wales, best value compliance inspections of those bodies are known as 'whole authority analyses'.
PART 2, CHAPTER 4: GENERAL
Clause 51: Social security references and reports to Secretary of State
105. This clause empowers the Auditor General to refer to the Secretary of State (in practice, the Secretary of State for Work and Pensions) matters arising from work undertaken under Part 2 of the Bill if he considers it relevant to the Secretary of State's functions in respect of social security. An auditor appointed by the Auditor General is given a similar power.
Clauses 52 & 53: Rights of Auditor General for Wales to documents and information
106. These provisions are distinct from those in Clause 18, which deals with an appointed auditor's right of access to documents and information etc. However, they mirror those rights.
107. Under clause 52, the Auditor General has the right of access at all reasonable times to every document relating to a local government body in Wales which he considers necessary for the exercise of his functions under Part 2 of the Bill. By virtue of clause 14(3), his functions do not extend to the direct audit of the accounts of a local government body in Wales.
108. Subsection (2) makes it clear that the power of access to documents enables the Auditor General to have access to documents in a financial chain relating to the use of public money, in the same way as appointed auditors (see the notes on clause 18, above) - documents held or controlled by anyone who has received financial assistance from a local government body in Wales, or who has supplied goods or services to the body under a contract, or who has been a sub-contractor in relation to such a contract. The aim of this provision is to ensure that regularity, propriety and the principles of value for money apply to the use of public money at each stage in the chain of expenditure.
109. Clause 52 is consistent with section 95 of the GOWA (as substituted) in this respect (see the note on clause 11, above), and also with clause 18, which deals with the rights of appointed auditors to documents and information etc. when auditing the accounts of local government bodies in Wales. The Bill, thus, seeks to ensure a single standard of access to documents and information etc. in public sector audit in Wales, consistent with the recommendations made by Lord Sharman of Redlynch in his report "Holding to Account - the Review of Audit and Accountability for Central Government (February 2001)".
110. By virtue of clause 52(2)(c), the Assembly has a power to extend the categories of documents for the purposes of this clause. It may by order specify any other description of documents to which the appointed auditor's right of access will apply. Before making such an order, the Assembly must consult the Auditor General and such associations of local authorities in Wales as appear to be concerned. The Assembly may use this power in order to extend the description of documents etc. that the Auditor General may access in order to trace the use of public funds. For example, if the Auditor General is carrying out a value for money exercise in relation to one or more local government bodies in Wales, the Auditor General may need to have access to documents relating to the use of funds by organisations in receipt of significant grant funding. If an organisation had contracted with contractor A who in turn had sub-contracted with contractor B, the Assembly could make an order to ensure that the Auditor General could have access, if necessary, to relevant documents held by contractor B.
111. In addition to his right of access to documents, the Auditor General has a right to any assistance, information and explanation he thinks necessary for the purposes of carrying out his functions under Part 2. By virtue of subsections (4) and (5) of clause 52, he can require such assistance, information and explanation from anyone he thinks has information about:
The Auditor General can require such a person to attend before him in person to give the assistance, information or explanation, or to produce a document to which he has a right of access.
112. This right to information is intended to assist the Auditor General to ascertain the facts where, for instance, a document which he is entitled to see cannot be located. It is consistent with provisions in section 95 of the GOWA (as substituted by clause 11) and clause 18.
113. The Auditor General, like appointed auditors, is also entitled to every facility he may reasonably need in order to carry out his functions under Part 2 (e.g. adequate accommodation, lighting, heating, access to relevant computer hardware and software etc.), and any other information he may need to enable him to do his work.
114. The main functions of the Auditor General to which these rights of access apply are: appointing auditors under clause 14; undertaking economy, efficiency, effectiveness and other studies under clauses 41, 42, 44 and 45; ordering an extraordinary audit under clause 37; and issuing directions under clause 47. The rights also apply to the Auditor General's functions under Chapter 3 (Best Value).
115. Clause 52(6) also gives the Auditor General rights to inspect specific documents for the purpose of ensuring that auditors appointed by him are maintaining proper standards when auditing the accounts of local government bodies in Wales.
116. Clause 53 specifies that a person who fails to comply, without reasonable excuse, with any of the Auditor General's requirements under clause 52(4) is guilty of an offence, specifies the penalty applicable, and provides for the recovery of any expenses incurred by the Auditor General in connection with a successful prosecution under the clause.
Clause 54: Restriction on disclosure of information
117. This clause places restrictions on the disclosure of certain information relating to a particular body or person. The restrictions apply where information is acquired by the Auditor General, an appointed auditor (or by a person acting on behalf of the Auditor General or an appointed auditor) in the course of exercising their functions under:
The information must not be disclosed unless in accordance with the exceptions listed in clause 54(2). One of the exceptions is that the disclosure is made for the purposes of any functions of the Auditor General for Wales, or of an auditor, under Part 2 of the Bill or Part 1 of the Local Government Act 1999. Thus clause 54 does not obstruct the Auditor General or an auditor from putting into the public domain any information which should be put there for the proper exercise of that person's functions.
118. Disclosing the information in contravention of clause 54(2) constitutes an offence under clause 54(3).
119. Clause 54 mirrors the provisions of section 49 of the ACA. At the time of the passage of the Bill, section 49 of the ACA is under review by the Department of Constitutional Affairs with a view to its amendment or repeal by order under section 75 of the Freedom of Information Act 2000. This is because section 49 is a provision capable of preventing the disclosure of information under section 1 of the Freedom of Information Act. In order to ensure that clause 54 remains consistent with section 49 after (and assuming that) the Bill is enacted, clause 54(6) gives the Secretary of State (in practice, the Secretary of State for Wales) an order-making power to amend or repeal clause 54 in such a way as to reflect amendments to or repeal of section 49 of the ACA. The order-making power cannot be used so as to make clause 54 more restrictive of the disclosure of information than it currently is. Any order made under clause 54(6) would be subject to approval by both Houses of Parliament, in the same way as an order under section 75 of the Freedom of Information Act, amending or repealing section 49 of the ACA, would be.
Clause 55: Supply of benefit information to Auditor General for Wales
120. This clause enables the Secretary of State (in practice, the Secretary of State for Work and Pensions) to supply the Auditor General with information in respect of housing benefit and council tax benefit that he considers relevant to the Auditor General's functions.
Clause 56: Publication of information by Auditor General for Wales
121. This clause gives the Auditor General power to publish particular information relating to audits carried out under Part 2 of the Bill. Other powers of, or duties on, the Auditor General to publish are contained in various provisions of the Part, e.g. in relation to studies under clause 41. The information covered by clause 56 is information relating to:
122. In relation to public interest reports by appointed auditors, and contraventions of account and audit regulations under section 39, the Auditor General must not publish details of any decision made at a meeting of the body in question while the public were excluded from that meeting on certain grounds. The grounds are that confidential information (within the meaning of s. 100A(3) of the Local Government Act 1972), exempt information (within the meaning of section 100I of that Act) or information which it would be prejudicial to the public interest to disclose, was to be discussed in order to reach the decision.
123. The Auditor General must inform a body before publishing information concerning it. He must publish the information in a way that he considers appropriate for bringing it to the attention of those who may be interested in it.
Clause 57: Provision of information to Audit Commission
124. This clause requires the Auditor General to provide the Audit Commission, if it so requests, with information to enable it to make comparisons between local government bodies in Wales (as defined in clauses 12 and 59(5)) and other local government bodies in respect of which the Audit Commission has functions. The duty on the Auditor General applies only when the Commission is requesting such information for the purposes of its functions under sections 33 and 34 of the ACA (to undertake or promote studies for improving economy etc in services and studies on the impact of statutory provisions, etc). The purpose of the clause is to facilitate cross-border comparisons between bodies and sectors, with the aim of raising standards in both England and Wales. The equivalent duty is placed on the Audit Commission to supply information to the Auditor General by Schedule 2, amending the ACA. These duties are complementary to other duties and powers of co-operation applicable to the Auditor General and the Audit Commission elsewhere in the Bill, particularly in clause 43 and in other provisions of Schedule 2.
125. The Auditor General can of course supply other information to the Commission, where to do so is within his powers.
Clause 58: Orders and regulations
126. This clause sets out the procedures for making orders and regulations, by the Assembly or the Secretary of State, under Part 2 of the Bill.
Clause 59: Interpretation of Part 2
127. This clause sets out the interpretation of certain terms for the purposes of Part 2.
PART 3: WELSH NHS BODIES
Clause 61: Audit of Welsh NHS bodies
128. The clause makes the Auditor General responsible for the financial audit of the accounts of Welsh NHS bodies (as defined in clause 60), in place of the Audit Commission, which currently audits these accounts. It requires the accounts to be submitted to the Auditor General no later than 5 months following the end of the financial year to which they relate. The Auditor General is required to examine and certify the accounts submitted to him; and to lay a copy of them together with his report on them before the Assembly within 4 months of them being submitted to him.
129. In examining the accounts the Auditor General must satisfy himself, amongst other things, that the body has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.
Clause 62: Co-operation with Assembly, Audit Commission or CHAI
130. The clause imposes a duty on the Auditor General to co-operate with the Assembly, the Audit Commission and with CHAI (established by the Health and Social Care (Community Health and Standards) Act 2003, where it seems appropriate for the efficient and effective discharge of his functions in relation to Welsh NHS bodies. In the case of CHAI, this is consistent with the Assembly's objective of ensuring effective cross-border co-operation in respect of economy, efficiency and effectiveness studies and other studies which are of common interest and benefit to England and Wales. The clause also seeks to ensure that the day-to-day impact, on the Welsh NHS bodies, of the carrying out of studies and reviews is minimised through co-operation between the regulatory bodies.
131. Complementary duties are imposed on the Assembly, the Audit Commission and CHAI via amendments, in Schedule 2 of the Bill, to the GOWA, the ACA and the Health and Social Care (Community Health and Standards) Act 2003 respectively. See also the notes concerning clause 64 below.
Clause 63: Audit of accounts of officers of Welsh NHS bodies
132. The clause applies the Auditor General's financial audit responsibilities to the accounts of an officer of a Welsh NHS body who holds money or property on its behalf (for instance a named charitable trustee).
Clause 64: Provision of information by CHAI
133. This clause obliges CHAI to provide the Auditor General, if he so requests, with information to enable him to make comparisons between Welsh NHS bodies on the one hand, and English NHS bodies and cross-border Special Health Authorities, on the other. The duty on CHAI applies where the Auditor General is exercising his functions under section 145 or 145A of the GOWA in relation to one or more Welsh NHS bodies - that is, his functions of undertaking or promoting studies into the economy, efficiency and effectiveness of the use of resources by such bodies, or into how they provide their services. The equivalent duty is imposed on the Auditor General by Schedule 2, amending the Health and Social Care (Community Health and Standards) Act 2003. The intention of these two provisions is to facilitate the raising of standards in both England and Wales by enabling the regulatory bodies to compare practice in the two countries. The duties the two provisions impose are complementary to other duties and powers of co-operation applicable to the Auditor General and CHAI elsewhere in the Bill, particularly in clause 62 and other provisions of Schedule 2.
PART 4: MISCELLANEOUS AND GENERAL
Clause 65: Public bodies subject to audit etc
134. Clause 65 of the Bill amends section 144 of the GOWA. The previous position was that section 144(8) empowered only the Secretary of State, by order, to alter the list of bodies/offices subject to audit etc. provisions in Schedule 17 of the GOWA. The Secretary of State had (and has) the power to do so, by adding any public body (subject to certain specified exceptions) to the list; omitting any public body from the list; or altering the description of any public body in the list in Schedule 17 to the GOWA.
135. The significance of Schedule 17 is, first, that if a public body is listed in Parts 1 or 2 of it, the Secretary of State can then, by order (and subject to section 144(2) of the GOWA), make provision about that public body's accounts, the audit of those accounts or about reports it must make concerning the exercise of its functions. Such an order could include a requirement that the public body's auditor be the Auditor General. Secondly, once a public body is listed in Schedule 17, the Auditor General has the power to carry out a economy, efficiency and effectiveness examination into the way in which it has used its resources in discharging its functions (see section 145(1) of the GOWA). Under the Bill, the Auditor General will also have the power to carry out other studies in relation to such a body, by virtue of clause 3 of the Bill , which inserts a section 145A into the GOWA.
136. Clause 65(2) of the Bill inserts a new subsection (8A) into section 144 of the GOWA. This provision enables the Assembly, with the consent of the Secretary of State, to amend Schedule 17 of the GOWA by order. Thus the Assembly and the Secretary of State will have largely parallel powers in this regard. However, unlike the Secretary of State, the Assembly will not be able to take public bodies out of Schedule 17, only add public bodies to it or alter the description of those public bodies contained within it.
137. Clause 65(4) of the Bill has the effect of adding the Care Council for Wales, an Assembly Sponsored Public Body, to Part 1 of Schedule 17 to the GOWA, so as to ensure that the Auditor General has the power to undertake economy, efficiency and effectiveness examinations in respect of it. The Care Standards Act 2000 did not include the Care Council for Wales in Schedule 17 to the GOWA for this purpose, although that Act does make provision for the financial audit of it's the Council's accounts. The proposed amendment puts the audit of the Council on the normal statutory footing for Assembly Sponsored Public Bodies.
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