By Vivienne Russell | 26 November 2012
The Welsh Public Accounts Committee has backed the principle of public audit reforms in Wales but said some proposals risk fettering the independence of the auditor general and should be ditched.
Following a consultation, the Public Audit (Wales) Bill was introduced to the Assembly for debate in July with the aim of strengthening accountability arrangements. It proposes creating a new Wales Audit Office, which would take over the corporate functions currently vested in the role of auditor general for Wales. The new WAO, through its board, would also have the power to monitor and advise the auditor general.
Reporting on the first stage of the Bill on November 23, the PAC said it was generally supportive of the legislation’s principles but wanted several amendments to safeguard the independence of the auditor general.
It calls for the removal of Section 26 of the Bill, which requires the auditor general to submit a statement to the WAO board seeking approval for his annual work programme and the resources needed to carry it out. The section also gives the WAO the power to reject some or all of this statement if it considered it to be ‘unreasonable’.
The PAC said such a provision was ‘unacceptable as it gives rise to the possibility that the board could fetter the independent exercise of the AGW’s statutory functions’.
Finance minister Jane Hutt has already indicated that she will remove this section during the Bill’s next stage and this has been welcomed by the committee.
PAC chair Darren Millar said: ‘The actions of a former auditor general clearly demonstrated a need for the position to have both sufficient support and robust financial scrutiny.
‘But while the committee has agreed the general principles of the Bill it has also made recommendations which will ensure that, amongst other things, the position's independence to carry out duties placed upon it and its accountability to the National Assembly will continue.’
The committee is also seeking amendments to the composition of the WAO board so that it includes more executive members, of whom one should be elected by the staff of the office.
It also raised concerns about the transfer of staff from the employment of the auditor general to the new WAO. Ministers say this would be an administrative rather than a business transfer, therefore the Transfer of Undertaking (Protection of Employment) regulations would not apply. Hutt told the committee that staff would not lose continuity of employment or be disadvantaged in any way.
However, both the auditor general and trade unions have expressed concerns that the clauses in the Bill do not protect staff as much as Tupe.
The PAC said WAO staff should not be disadvantaged by the transfer, adding that it was ‘very concerned’ at the difference of opinion between the minister and the auditor general over this matter. ‘We urge the minister and the auditor general to resolve these differences before Stage Two commences.’
