Constitutional Reform and Governance Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Constitutional Reform and Governance Bill

Constitutional Reform and Governance Bill
Part 10 — National audit
40

The National Audit Office
72
Incorporation of the National Audit Office
(1)
There is to be a body corporate called the National Audit Office.
(2)
In Welsh it is called Y Swyddfa Archwilio Genedlaethol.
(3)
In this Part “NAO” means the National Audit Office.
5
(4)
Schedule 11 (which is about NAO) has effect.
73
Interaction between NAO and the Comptroller and Auditor General
Schedule 12 (which is about the interaction between NAO and the Comptroller
and Auditor General) has effect.
74
NAO’s expenditure
10
(1)
NAO’s expenditure is to be paid out of money provided by Parliament.

(But see sections 69(6) and 76(1) and paragraph 6(2) of Schedule 11.)
(2)
For each financial year, NAO and the Comptroller and Auditor General must
jointly prepare an estimate of NAO’s use of resources.
(3)
This must cover (in particular) the resources required for the purposes of
15
paragraph 2(1) of Schedule 12 (which requires NAO to provide resources for
the Comptroller and Auditor General’s functions).
(4)
The chair of NAO and the Comptroller and Auditor General must jointly
submit the estimate to the Commission.
(5)
The Commission must—
20
(a)
review the estimate, and
(b)
lay it before the House of Commons with the modifications (if any) the
Commission thinks appropriate.
(6)
In doing this the Commission must have regard to any advice given by the
Committee of Public Accounts or the Treasury.
25
Other matters
75
Efficiency etc
(1)
NAO and the Comptroller and Auditor General must aim to do things
efficiently and cost-effectively.
(2)
The Comptroller and Auditor General must, as the Comptroller and Auditor
30
General thinks appropriate, have regard to the standards and principles that an
expert professional provider of accounting or auditing services would be
expected to apply.
76
Indemnification
(1)
There is to be charged on and paid out of the Consolidated Fund, any amount
35
payable by an indemnified person in consequence of any liability for breach of

Constitutional Reform and Governance Bill
Part 10 — National audit
41

duty (whether under a contract or otherwise) incurred by an indemnified
person in relation to any audit, examination or inspection carried out as part of
the Comptroller and Auditor General’s functions.
(2)
The liability must not be to another indemnified person.
(3)
The following are indemnified persons—
5
(a)
the Comptroller and Auditor General;
(b)
NAO;
(c)
a past or present member of NAO;
(d)
a past or present employee of NAO.
77
Definitions
10
(1)
In this Part—
“the Commission” means the Public Accounts Commission;
“function” includes power or duty;
“NAO” is defined in section 72(3);
“statutory provision” means a provision of an Act or subordinate
15
legislation (as defined in section 21(1) of the Interpretation Act 1978
(c. 30)) (whenever passed or made);
“use of resources” is to be read in accordance with section 27 of the
Government Resources and Accounts Act 2000 (c. 20).
(2)
For the purposes of this Part each of the following is a financial year—
20
(a)
the period which begins with the appointed day and ends with the
following 31 March;
(b)
each successive period of 12 months.
(3)
In subsection (2)(a) “the appointed day” means the day appointed for the
purposes of subsection (2)(a) by an order made by the Treasury by statutory
25
instrument.
(4)
Section 13 of the National Audit Act 1983 (c. 44) (interpretation of references to
the Committee of Public Accounts) applies for the purposes of this Part as it
applies for the purposes of that Act.
78
Transitional provision and consequential amendments
30
(1)
Schedule 13 (which contains transitional provision) has effect.
(2)
Schedule 14 (which contains amendments consequential on this Part) has
effect.
79
Power to make Companies Act companies subject to audit of Comptroller and
Auditor General
35
After section 25(10) of the Government Resources and Accounts Act 2000
insert—
“(11)
Subsection (10)(c) does not apply to an order under subsection (6) if the
only bodies covered by the order are bodies which are companies as
defined in section 1(1) of the Companies Act 2006.
40

See sections 475 and 482 of that Act for provision about the interaction
between Part 16 of that Act (audit) and orders under subsection (6).

Constitutional Reform and Governance Bill
Part 10 — National audit
42

(12)
An order to which subsection (10)(c) does not apply by virtue of
subsection (11) is subject to annulment in pursuance of a resolution of
either House of Parliament.”
80
Powers of National Assembly for Wales: Auditor General for Wales
(1)
Schedule 5 to the Government of Wales Act 2006 (c. 32) is amended as follows.
5
(2)
In Part 1, under Field 14, insert—
“Matter 14.1
     (1)
The following aspects of the Auditor General’s terms of
appointment—
(a)
the period of the appointment;
10
(b)
salary, allowances and superannuation benefits;
(c)
pensions and gratuities payable after a person has ceased to
hold the office.
      (2)
The number of times a person may be appointed to the office of
Auditor General.
15
      (3)
Restrictions on the other offices and positions which may be held by
the person who is the Auditor General; activities of a person who has
held the office of Auditor General (but no longer does).
      (4)
Provision requiring the Auditor General—
(a)
to aim to do things efficiently and cost-effectively;
20
(b)
to have regard, as the Auditor General thinks appropriate, to
the standards and principles that an expert professional
provider of accounting or auditing services would be
expected to apply.
      (5)
The authorisation of persons to exercise functions of the Auditor
25
General on the Auditor General’s behalf (including during a vacancy
in the office).
      (6)
The oversight or supervision of the Auditor General or of the
exercise of the Auditor General’s functions.
      (7)
The provision or use of resources for the purposes of the Auditor
30
General’s functions including (in particular)—
(a)
the employment and use of staff;
(b)
the procurement and use of services;
(c)
the holding of documents or information;
(d)
the keeping of records.
35
      (8)
The charging of fees or other amounts in relation to functions of—
(a)
the Auditor General, or
(b)
auditors appointed by the Auditor General under
enactments.
      (9)
The restatement of any law relating to the Auditor General.”
40

Constitutional Reform and Governance Bill
Part 11 — Transparency of government financial reporting to Parliament
43

(3)
In Part 2, after paragraph 6, insert—
“6A   (1)
This paragraph applies to a provision of an Assembly Measure
which—
(a)
is a matter 14.1 provision;
(b)
provides for the enforcement of a matter 14.1 provision or is
5
otherwise appropriate for making a matter 14.1 provision
effective;
(c)
is otherwise incidental to, or consequential on, a matter 14.1
provision.

“Matter 14.1 provision” means a provision which relates to matter
10
14.1 (and section 94(7) applies for the purposes of this definition as it
applies for the purposes of section 94).
      (2)
The following provisions do not apply in relation to a provision to
which this paragraph applies—
(a)
paragraph 3 so far as it applies in relation to sections 145,
15
145A and 146A(1) of the Government of Wales Act 1998;
(b)
paragraph 6(1).
      (3)
Subject to sub-paragraph (4), a provision to which this paragraph
applies cannot—
(a)
modify or confer power by subordinate legislation to modify
20
paragraph 3 of Schedule 8, or
(b)
give or confer power by subordinate legislation to give any
role to a committee of the Assembly.
      (4)
Sub-paragraph (3) does not limit any role which may be given to a
committee of the Assembly which meets the requirements in sub-
25
paragraph (5) (whether established by virtue of a provision to which
this paragraph applies or otherwise).
      (5)
The requirements are—
(a)
none of the following may be a member of the committee—
(i)
the First Minister or any person designated to exercise
30
functions of the First Minister;
(ii)
a Welsh Minister appointed under section 48;
(iii)
the Counsel General or any person designated to
exercise the functions of the Counsel General;
(iv)
a Deputy Welsh Minister;
35
(b)
the committee must not be chaired by an Assembly member
who is a member of a political group with an executive role.”
Part 11
Transparency of government financial reporting to Parliament
81
Inclusion in departmental estimates of resources used by designated bodies
40
(1)
The Government Resources and Accounts Act 2000 (c. 20) is amended as
follows.

Constitutional Reform and Governance Bill
Part 11 — Transparency of government financial reporting to Parliament
44

(2)
After section 4 insert—
“Departmental estimates
4A
Inclusion in departmental estimates of resources used by designated
bodies
(1)
An estimate for a government department for approval by the House
5
of Commons in respect of a financial year must be prepared in
accordance with directions issued by the Treasury.
(2)
The Treasury may direct that the estimate is to include information
relating to resources expected to be used by any body that is a
designated body in relation to the department.
10
(3)
For the purposes of this section a body is a “designated” body in
relation to a government department if—
(a)
it is designated in relation to the department by an order made
by the Treasury, or
(b)
it falls within a description of body designated in relation to the
15
department by such an order.
(4)
A body, or a description of body, may be designated in relation to a
government department for a particular financial year or generally.
(5)
Subsections (6) and (7) apply if the Treasury—
(a)
expect the use of resources by a body in a financial year to
20
involve payments out of a devolved Consolidated Fund to or
for the benefit of the body, but
(b)
do not expect the use of resources by the body in the year to
involve payments out of the Consolidated Fund of the United
Kingdom to or for the benefit of the body.
25
(6)
If an order is in force under which the body would (but for this
subsection) be a designated body for the year in relation to a
government department—
(a)
the Treasury must notify the department that the conditions in
subsection (5) are met in the case of the body for the year, and
30
(b)
the body is to be treated as if it were not designated for the year
in relation to the department.
(7)
If no such order is in force, the Treasury may not make one.
(8)
Before designating a body, or a description of body, the Treasury must,
where they think it appropriate, consult—
35
(a)
the Scottish Ministers,
(b)
the Department of Finance and Personnel for Northern Ireland,
or
(c)
the Welsh Ministers.
(9)
In determining for any purpose whether a body has a particular
40
relationship with a government department (for example, whether it is
controlled by, or otherwise dependent on, the department), the
following must be disregarded—
(a)
the fact that an estimate for the department in respect of a
financial year includes information relating to the body, and
45

Constitutional Reform and Governance Bill
Part 11 — Transparency of government financial reporting to Parliament
45

(b)
the fact that the department’s resource accounts for a financial
year prepared under section 5 include information relating to
the body.
(10)
An order under subsection (3) is to be made by statutory instrument.
(11)
A statutory instrument containing an order under that subsection is
5
subject to annulment in pursuance of a resolution of either House of
Parliament.
(12)
In this section “a devolved Consolidated Fund” means—
(a)
the Scottish Consolidated Fund,
(b)
the Consolidated Fund of Northern Ireland, or
10
(c)
the Welsh Consolidated Fund.”
(3)
In section 5(1) (resource accounts: preparation), for paragraphs (a) and (b)
substitute—
“(a)
resources acquired, held or disposed of during the year by—
(i)
the department, or
15
(ii)
any body that is a designated body under section 4A in
relation to the department for the year, and
(b)
the use of resources during the year by the department or any
such body.”
(4)
In section 6(1) (resource accounts: scrutiny by the Comptroller and Auditor
20
General), for paragraph (d) substitute—
“(d)
that—
(i)
the financial transactions of the department, and
(ii)
the financial transactions of any body that is a
designated body under section 4A in relation to the
25
department for the year in question,

are in accordance with any relevant authority.”
82
Corresponding provision in relation to Wales
(1)
Part 5 of the Government of Wales Act 2006 (c. 32) (finance) is amended as
follows.
30
(2)
After section 126 insert—
“126A
  Inclusion in Budget motions of resources used by designated bodies
(1)
A Budget motion for a financial year may include information relating
to resources expected to be used by any body that is a designated body
in relation to a relevant person.
35
(2)
For the purposes of this section a body is a “designated” body in
relation to a relevant person if—
(a)
it is designated in relation to the relevant person by an order
made by the Welsh Ministers, or
(b)
it falls within a description of body designated in relation to the
40
relevant person by such an order.
(3)
A body, or a description of body, may be designated in relation to a
relevant person for a particular financial year or generally.

Constitutional Reform and Governance Bill
Part 11 — Transparency of government financial reporting to Parliament
46

(4)
If the Welsh Ministers expect the use of resources by a body in a
financial year to involve payments out of a relevant Consolidated Fund
to or for the benefit of the body, they may not make an order under
which the body would be a designated body for the year unless the
Treasury have consented to the making of the order.
5
(5)
“A relevant Consolidated Fund” means—
(a)
the Consolidated Fund of the United Kingdom,
(b)
the Scottish Consolidated Fund, or
(c)
the Consolidated Fund of Northern Ireland.
(6)
The Welsh Ministers must, where they think it appropriate, consult the
10
Treasury before designating a body or a description of body.
(7)
In determining for any purpose whether a body has a particular
relationship with a relevant person (for example, whether it is
controlled by, or otherwise dependent on, the person), the following
must be disregarded—
15
(a)
the fact that the provisions of a Budget motion relating to the
relevant person in respect of a financial year include
information relating to the body, and
(b)
the fact that the relevant person’s accounts for a financial year
prepared under this or any other Act include information
20
relating to the body.
(8)
An order under subsection (2) is to be made by statutory instrument.
(9)
A statutory instrument containing an order under that subsection is
subject to annulment in pursuance of a resolution of the National
Assembly for Wales.
25
(10)
But subsection (9) does not apply if a draft of the statutory instrument
containing the order has been laid before, and approved by a resolution
of, the National Assembly for Wales.”
(3)
Schedule 8 (Auditor General for Wales) is amended as follows.
(4)
In paragraph 13 (accounts of Auditor General), after sub-paragraph (1) insert—
30
   “(1A)
The directions which the Treasury may give under sub-paragraph
(1) include directions to prepare accounts relating to financial affairs
and transactions of persons other than the Auditor General.”
(5)
In paragraph 15 (audit of accounts of Auditor General)—
(a)
in sub-paragraph (5)(b)—
35
(i)
for “the Auditor General”, in the first place, substitute “a
relevant person”; and
(ii)
for “the Auditor General”, in the second place, substitute “the
relevant person”; and
(b)
after sub-paragraph (5) insert—
40
   “(5A)
In sub-paragraph (5)(b) “relevant person” means—
(a)
the Auditor General, or
(b)
any person to whose financial affairs and transactions
the accounts are to relate by virtue of paragraph
13(1A).”
45