Budget Responsibility and National Audit Bill [HL]

House of Commons

Session 2010 - 11
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Budget Responsibility and National Audit Bill [HL]

Budget Responsibility and National Audit Bill [HL]
Schedule 2 — National Audit Office
Part 6 — Procedural rules
22

16
The non-executive members may terminate the appointment of an employee
member by giving the member written notice if—
(a)
the member has been absent from meetings of NAO without NAO’s
permission for a period of more than 3 months,
(b)
the member has become bankrupt or has made an arrangement with
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creditors,
(c)
the member’s estate has been sequestrated in Scotland or the
member has entered into a debt arrangement programme under Part
1 of the Debt Arrangement and Attachment (Scotland) Act 2002 (asp
17) as the debtor or has, under Scots law, made a composition or
10
arrangement with, or granted a trust deed for, the member’s
creditors,
(d)
the member is unfit to continue the appointment because of
misconduct,
(e)
the member has failed to comply with the terms of the appointment,
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or
(f)
the member is otherwise unable, unfit or unwilling to carry out the
member’s functions.
Part 5
Employees
20
17    (1)
NAO may employ staff.
      (2)
In determining the terms of employment of any staff, NAO must have
regard to the desirability of keeping the terms broadly in line with those
applying to civil servants.
      (3)
A person who is an employee of NAO may not hold any office or position to
25
which a person may be appointed, or recommended for appointment, by or
on behalf of the Crown.
Part 6
Procedural rules
General
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18
NAO must make rules for the purpose of regulating NAO’s procedure.
Quorum for NAO meetings
19
If the rules provide for a quorum for any meetings of NAO, the quorum
cannot be met unless a majority of the members present are non-executive
members.
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Committees
20    (1)
The rules may include—
(a)
provision for the setting up of committees of NAO and for those
committees to set up sub-committees, and
(b)
provision regulating the procedures of those committees and sub-
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committees.

Budget Responsibility and National Audit Bill [HL]
Schedule 2 — National Audit Office
Part 7 — Other matters
23

      (2)
An employee of NAO who is not an employee member may be a member of
a committee or sub-committee.
      (3)
A person who is neither a member of NAO nor an employee of NAO may
be a member of a committee or sub-committee, provided that no functions
of NAO are delegated to the committee or sub-committee (see paragraph
5
23).
Part 7
Other matters
Powers
21
NAO may do anything calculated to facilitate, or incidental or conducive to,
10
the carrying out of any of its functions.
Validity
22
The validity of anything done by NAO, the non-executive members or any
committee or sub-committee is not affected by—
(a)
a vacancy, or
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(b)
a defective appointment.
Delegation of functions
23    (1)
NAO may delegate functions to any of its members, employees or
committees.
      (2)
A committee may delegate functions (including functions delegated to it) to
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a sub-committee.
      (3)
The delegation of a function does not prevent NAO or the committee (as the
case may be) from carrying out the function itself.
      (4)
Functions under the following provisions may not be delegated—
(a)
section 23(2) of this Act;
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(b)
paragraph 18 or 25(1) of this Schedule;
(c)
paragraph 1(1), 3(1) or (3), 7(3), 9(1) or 10(1) to (5) of Schedule 3.
NAO to prepare resource accounts
24    (1)
Resource accounts of the kind mentioned in section 5 of the Government
Resources and Accounts Act 2000 must be prepared for NAO for each
30
financial year by the person appointed as accounting officer under this
paragraph.
      (2)
The Public Accounts Commission must appoint the Comptroller and
Auditor General or some other appropriate person as accounting officer.
      (3)
The person appointed as accounting officer must carry out any other
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functions determined by the Commission.
Audit of NAO
25    (1)
NAO must appoint an auditor for NAO for each financial year.

Budget Responsibility and National Audit Bill [HL]
Schedule 2 — National Audit Office
Part 7 — Other matters
24

      (2)
The approval of the Public Accounts Commission is required for the
appointment (including its terms).
      (3)
The auditor must be eligible for appointment as a statutory auditor by virtue
of Chapter 2 of Part 42 of the Companies Act 2006.
      (4)
Section 1214 (independence requirement) and section 1216 (effect of
5
appointment of a partnership) of that Act apply as if the audit of NAO were
a statutory audit.
      (5)
The auditor must examine NAO’s resource accounts for the financial year.
      (6)
Sections 6(1) and 25(2) of the Government Resources and Accounts Act 2000
apply (with any necessary modifications) in relation to the examination as
10
they apply in relation to an examination by the Comptroller and Auditor
General of the resource accounts of a department.
      (7)
On completion of the examination the auditor must—
(a)
certify the accounts, and
(b)
send them, together with the auditor’s report on them, to the Public
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Accounts Commission.
      (8)
The Commission must lay the accounts and report before the House of
Commons.
26    (1)
The terms of the auditor’s appointment may require the auditor to carry out
economy, efficiency and effectiveness examinations of the use of NAO’s
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resources.
      (2)
On completion of the examinations the auditor must prepare a report and
send it to the Public Accounts Commission.
      (3)
The Commission must lay the report before the House of Commons.
27    (1)
The auditor may require access at any reasonable time to any document
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where the auditor reasonably thinks it necessary for the purposes of the
auditor’s functions under paragraph 25 or 26.
      (2)
The auditor may also require any person holding or accountable for any
document to provide any information or explanation that the auditor
reasonably thinks necessary for those purposes.
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Documentary evidence
28    (1)
The application of NAO’s seal is to be authenticated by the signature of—
(a)
a member of NAO, or
(b)
any person authorised (whether generally or specifically) for the
purpose by a member of NAO.
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      (2)
A document purporting to be duly executed under NAO’s seal or signed on
its behalf—
(a)
is to be received in evidence, and
(b)
is to be taken to be executed or signed in that way, unless the
contrary is proved.
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      (3)
This paragraph does not extend to Scotland.

Budget Responsibility and National Audit Bill [HL]
Schedule 3 — Relationship between NAO and Comptroller and Auditor General
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Schedule 3
Section 22

Relationship between NAO and Comptroller and Auditor General
Strategy
1     (1)
NAO and the Comptroller and Auditor General must jointly—
(a)
prepare a strategy for the national audit functions, and
5
(b)
review the strategy (and revise it as appropriate) at least once every
12 months.

“The national audit functions” means NAO’s functions and the Comptroller
and Auditor General’s functions.
      (2)
The strategy must—
10
(a)
for the period for the time being covered by it, include a plan for the
use of resources for the national audit functions;
(b)
for each financial year for the time being covered by it, specify the
maximum amount of resources to be provided by NAO for the
purposes of paragraph 2(1).
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      (3)
The strategy (including any revision) must be approved by the Public
Accounts Commission.
      (4)
For this purpose the person who chairs NAO and the Comptroller and
Auditor General must jointly submit the strategy (or revision) to the
Commission.
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      (5)
Before approving the strategy (or revision) the Commission must review it
and may modify it.
      (6)
In doing this the Commission must have regard to any advice given by the
Treasury.
      (7)
NAO and the Comptroller and Auditor General must each give effect to the
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strategy.
NAO to provide resources for the Comptroller and Auditor General’s functions
2     (1)
NAO must provide resources for the Comptroller and Auditor General’s
functions as required by the Comptroller and Auditor General.
      (2)
In particular, NAO is responsible for—
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(a)
employing staff to assist in the carrying out of those functions,
(b)
procuring services for the purposes of those functions,
(c)
holding documents or information acquired or generated in the
course of, or otherwise for the purposes of, those functions (see,
further, paragraph 13), and
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(d)
keeping records in relation to those functions,

as required by the Comptroller and Auditor General.
      (3)
For any financial year the maximum amount of resources that the
Comptroller and Auditor General may require for the purposes of sub-
paragraph (1) is the maximum amount specified for that year under
40
paragraph 1(2)(b).
      (4)
Sub-paragraph (1) is also subject to paragraph 3.

Budget Responsibility and National Audit Bill [HL]
Schedule 3 — Relationship between NAO and Comptroller and Auditor General
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Provision of certain services by Comptroller and Auditor General to require NAO’s approval
3     (1)
The Comptroller and Auditor General may provide services that are not
within sub-paragraph (2) only with NAO’s approval.
      (2)
The services within this sub-paragraph are services provided by the
Comptroller and Auditor General—
5
(a)
to NAO by virtue of Schedule 2 to this Act,
(b)
that are part of, or are incidental to, the Comptroller and Auditor
General’s functions under the following Acts—
(i)
the Exchequer and Audit Departments Act 1866,
(ii)
the Exchequer and Audit Departments Act 1921,
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(iii)
the National Loans Act 1968,
(iv)
the National Audit Act 1983, and
(v)
the Government Resources and Accounts Act 2000, or
(c)
that consist of, or are incidental to, an audit, examination or
inspection that the Comptroller and Auditor General is required or
15
authorised to carry out by a statutory provision, other than section
1226 of the Companies Act 2006 (eligibility for appointment as a
statutory auditor) and any provision of this Part of this Act.
      (3)
If NAO approves the provision of any services under sub-paragraph (1), it is
for NAO to determine the maximum amount of resources that the
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Comptroller and Auditor General may require for the services for the
purposes of paragraph 2(1).
      (4)
In this Schedule “NAO-approved services” means services provided with
NAO’s approval under sub-paragraph (1).
NAO to monitor and provide advice
25
4
NAO must, in such manner as it considers appropriate, monitor the carrying
out of the Comptroller and Auditor General’s functions.
5     (1)
NAO may provide advice to the Comptroller and Auditor General about the
Comptroller and Auditor General’s functions.
      (2)
The Comptroller and Auditor General must have regard to any advice
30
given.
Delegation of Comptroller and Auditor General’s functions
6     (1)
The Comptroller and Auditor General may prepare a scheme for the
delegation of functions of that office to employees of NAO.
      (2)
The scheme (including any revision) must be approved by the Public
35
Accounts Commission.
      (3)
If the Commission approves the scheme (or any revision), the Comptroller
and Auditor General may delegate functions in accordance with it.
      (4)
A delegation does not prevent the Comptroller and Auditor General from
doing anything personally.
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Budget Responsibility and National Audit Bill [HL]
Schedule 3 — Relationship between NAO and Comptroller and Auditor General
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Comptroller and Auditor General: vacancy or incapacity
7     (1)
This paragraph applies if the office of Comptroller and Auditor General is
vacant.
      (2)
This paragraph also applies if—
(a)
the Speaker of the House of Commons certifies to that House that, in
5
the view of the Speaker, the ability of the person who is Comptroller
and Auditor General to carry out the functions of that office is
seriously impaired because of ill health (whether mental or physical),
and
(b)
this paragraph has not previously applied in relation to that person.
10
      (3)
NAO may, with the agreement of the Public Accounts Commission,
authorise an employee of NAO to carry out the Comptroller and Auditor
General’s functions during the vacancy or period of ill health.
      (4)
The “period of ill health” means the period—
(a)
starting when the Speaker of the House of Commons certifies to that
15
House as mentioned in sub-paragraph (2)(a), and
(b)
ending when the Speaker certifies to that House that, in the view of
the Speaker, the person’s ability to carry out the functions of the
Comptroller and Auditor General is no longer seriously impaired
because of ill health.
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      (5)
The functions to which sub-paragraph (3) applies include the function of
delegating under paragraph 6.
      (6)
In relation to a vacancy or period of ill health of more than 6 months,
functions may not be carried out by virtue of sub-paragraph (3) after the end
of the first 6 months.
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Audit fees etc
8     (1)
NAO may charge fees for audits carried out by the Comptroller and Auditor
General.
      (2)
Any fees must be charged in accordance with a scheme prepared by NAO.
      (3)
The scheme (including any revision) must be approved by the Public
30
Accounts Commission.
      (4)
The agreement of a Minister of the Crown is required for the charging of a
fee if the accounts to be audited are the accounts of a body or other person
who acts on behalf of the Crown.

In this paragraph “Minister of the Crown” has the same meaning as in the
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Ministers of the Crown Act 1975.
      (5)
Sub-paragraphs (1) to (4) do not apply in relation to an audit carried out as
part of any NAO-approved services.
      (6)
The Comptroller and Auditor General may charge fees and other amounts
in relation to NAO-approved services, but only in accordance with the
40
agreement or other arrangements under which the services are provided.
      (7)
Fees and other amounts received by the Comptroller and Auditor General
must be paid to NAO.

Budget Responsibility and National Audit Bill [HL]
Schedule 3 — Relationship between NAO and Comptroller and Auditor General
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      (8)
Fees and other amounts received by NAO under this paragraph must be
paid into the Consolidated Fund.
Reports
9     (1)
NAO and the Comptroller and Auditor General must, as soon as practicable
after the end of each financial year, jointly prepare a report on the carrying
5
out during the year of the national audit functions (see paragraph 1(1)).
      (2)
The person who chairs NAO and the Comptroller and Auditor General must
jointly submit the report to the Public Accounts Commission.
      (3)
The Commission must lay the report before Parliament.
Code of practice
10
10    (1)
NAO and the Comptroller and Auditor General must jointly prepare a code
of practice dealing with the relationship between NAO and the Comptroller
and Auditor General.
      (2)
In doing this, they must (in particular) seek to reflect the principle set out in
section 17(1) and (2), subject to any limitations on that principle that are
15
agreed between the Public Accounts Commission, NAO and the
Comptroller and Auditor General.
      (3)
NAO and the Comptroller and Auditor General must jointly review the code
regularly and revise it as appropriate.
      (4)
In preparing or revising the code, they must consult the Treasury.
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      (5)
They must also consider any proposals for revisions of the code made by the
Commission from time to time.
      (6)
The code (including any revision) must be approved by the Commission.
      (7)
For this purpose, the person who chairs NAO and the Comptroller and
Auditor General must jointly submit the code (or revision) to the
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Commission.
      (8)
If the Commission approves the code (or revision), the Commission must lay
it before Parliament (stating the time from which it takes effect).
      (9)
NAO and the Comptroller and Auditor General must each comply with the
code.
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11    (1)
For the purposes of preparing or revising the code, the NAO must agree to
the code (including any revision) in accordance with this paragraph.
      (2)
The agreement must be given at a meeting of NAO.
      (3)
The agreement may be given only if at least one half of the non-executive
members present and voting on the matter vote in favour of giving the
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agreement.
      (4)
The requirements of this paragraph are in addition to any other
requirements relating to NAO’s procedure.
12    (1)
The code must include—
(a)
provision as to how the strategy required by paragraph 1 is to be
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prepared, reviewed and revised;