Memorandum by the National Audit Office
(NAO) (DRA 75)
EXECUTIVE SUMMARY
1. The National Audit Office (NAO) welcomes
the opportunity to submit this memorandum to the ODPM: Housing,
Planning, Local Government and the Regions Committee in support
of its pre-legislative scrutiny of the Draft Regional Assemblies
Bill. We have been asked to comment on the proposed audit and
inspection arrangements for elected regional assemblies. This
memorandum focuses on the aspects of the Draft Regional Assemblies
Bill that will enable Parliament to discharge its responsibilities
in relation to funding routed through the assemblies.
2. The NAO will not audit elected regional
assemblies but will have access rights to enable us to report
to Parliament on the effectiveness of performance frameworks or
other government interventions affecting the work of the assemblies
and their agencies and for the purpose of our audits of Central
Government Departments interacting with the assemblies. The NAO
has agreed with ODPM a set of broad principles under which we
will exercise access rights in line with Parliament's and Central
Government's interests in the assemblies. We will co-ordinate
our work with the Audit Commission, who will appoint auditors
for the assemblies, drawing on our long experience of co-operation
in areas such as the National Health Service and the criminal
justice system.
3. The Draft Regional Assemblies Bill gives
the NAO access rights to elected regional assemblies and their
functional bodies in connection with our value for money work
on Central Government bodies. ODPM has made a commitment to lay
an Order under the Government Resources and Accounts Act 2000
to give us equivalent access rights in connection with our financial
audit work on Central Government bodies. Parliament's ability
to discharge its responsibilities in relation to funding routed
through the assemblies will be incomplete until this Order is
laid.
THE ROLE
OF THE
NATIONAL AUDIT
OFFICE
4. The NAO scrutinises public spending on
behalf of Parliament. The head of the NAO is the Comptroller and
Auditor General (C&AG), who is an Officer of the House of
Commons.
5. We audit all aspects of Central Government
spending and provide an insight into the performance of public
services. Our value for money examinations look in detail at the
implementation of specific Central Government activities in order
to assess performance, identify good practice and suggest ways
in which public service could be improved. The C&AG, with
the NAO's support, is responsible for auditing the financial statements
of Central Government Departments, agencies and other public bodies.
We report the results of our value for money examinations and
financial audits to Parliament.
AUDIT OF
ELECTED REGIONAL
ASSEMBLIES
6. The Draft Regional Assemblies Bill (clauses
155 and 156) provides for the Audit Commission to appoint auditors
for the elected regional assemblies and their functional bodies.
The Audit Commission is also responsible for appointing the auditors
of local authorities and local bodies in health, housing, criminal
justice and fire and rescue services.
7. The NAO will not have audit responsibilities
in relation to elected regional assemblies but we will have access
to the assemblies and their functional bodies for our value for
money examinations and financial audits of Central Government
bodies. The Draft Regional Assemblies Bill (clause 157) provides
value for money access. ODPM intends to lay an Order under the
Government Resources and Accounts Act 2000 to provide financial
audit access. We have discussed and agreed our access rights with
ODPM.
8. The policy statement accompanying the
Draft Regional Assemblies Bill (paragraph 86) provides a further
explanation, which we have discussed and agreed with ODPM, of
the different roles that the Audit Commission and NAO will play
in relation to elected regional assemblies:
— elected regional assemblies and their
functional bodies would have auditors appointed by the Audit Commission
and would be subject to the Commission's "best value"
and value for money regimes (building on the lessons learned from
local government and tailoring requirements to the particular
circumstance of assemblies);
— the National Audit Office would,
for purposes of the financial audit and value for money studies
of Government Departments, have statutory rights of access to
documents held by the assemblies, for instance for reporting to
Parliament on the assemblies' contribution to national policies
and initiatives.
PARLIAMENT'S
INTEREST IN
REGIONAL ASSEMBLIES
9. NAO access to elected regional assemblies
is essential to enable Parliament to discharge its responsibilities
in relation to funding routed through the assemblies. The Draft
Regional Assemblies Bill (clause 56) allows the Secretary of State
to pay a grant to each assembly, subject to such conditions as
he thinks fit. The grant will come from money voted by Parliament.
Access will also allow the NAO to report to Parliament on the
contribution that elected regional assemblies make to Central
Government Departments' policies.
10. The NAO has agreed with ODPM a set of
broad principles under which we will exercise access rights (Annex).
The scope of Parliament's interest in the elected regional assemblies
would be co-extensive with that of Central Government itself,
so the NAO would exercise access rights in line with that interest.
In particular, the C&AG would report to Parliament on the
effectiveness of performance frameworks or other government interventions
affecting the work of the assemblies and their agencies.
CO-ORDINATED
WORKING WITH
THE AUDIT
COMMISSION
11. The NAO will work closely with the Audit
Commission to ensure audit resources are used economically, efficiently,
effectively and with due regard to the impact of audit work on
elected regional assemblies and their functional bodies. We will
co-ordinate our work drawing on our long experience of co-operation
in areas such as the National Health Service and the criminal
justice system.
CONCLUSION
12. The Draft Regional Assemblies Bill,
when combined with ODPM's commitment to lay an appropriate Order
under the Government Resources and Accounts Act 2000, protects
Parliament's ability to discharge its responsibilities in relation
to funding routed through the assemblies by granting the C&AG
access rights to elected regional assemblies and their functional
bodies.
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