Public Sector Accountability and Auditing in the UK ROLE OF NATIONAL AUDIT OFFICE

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Public Sector Accountability and Auditing in the
UKROLE OF NATIONAL AUDIT OFFICERELATIONSHIP
WITH PARLIAMENTforDistinguished IRAQI
Delegation18 June 2009

• Bill Burnett, Director, International
• Nigel Penny, International Manager Project
  Leader

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UK Public Accountability Framework

• OVERALL FRAMEWORK (background for understanding
  PAC NAO)
• UK Constitution highlights
• Separation of functions
• INTERNAL ACCOUNTABILITY (not covered further in
  this presentation)
• Controls in Ministries Corporate Governance
• Internal Controls, including Financial
  Controls
• Public Reporting
• Internal Audit
• EXTERNAL ACCOUNTABILITY
• Overview
• Parliament PAC
• NAO role within cycle of accountability

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Overall - UK Constitution - highlights

• Separation of duties between
• the Crown (the Queen and her Ministers) and
• Parliament
• Judiciary
• Legislative and financial authority rests with
  Parliament
• Legislation exists to limit and/or regulate
  powers of Ministers
• Ministers may do what they are not precluded from
  doing but can only pay for activities agreed or
  voted by Parliament

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Overall - UK Government Administration

• Role of Ministers
• Set strategy and policy
• Role of Civil Servants
• Implement policy
• Provide policy advice
• Day to day administration

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External Accountability

• Parliament
• PAC and other select committees
• National Audit Office
• Media
• Whistle blowing policies
• Freedom of Information
• Inspectors/Regulators professional reviews
  guidelines
• Ombudsmen administrative reviews on complaint

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The External Accountability Process the
Committee of Public Accounts
Government requests and Parliament grant funds
CAG examines spending and reports to Parliament
Government Response
PAC session and report
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UK Public Accounts Committee
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The Committee
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External Accountability Committee (1)

• Chaired by senior opposition MP (by convention)
• Membership represents balance of parties
• Addresses Policy Implementation NOT Policy
• Non-political (a Committee of Parliament rather
  than Parties)
• Unanimous reports very rare for need of a vote

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External Accountability Committee (2)

• Sits twice a week when Parliament is in session
• Verbatim transcript and video
• Meetings are open to Press and Public
• Prepares a report and recommendations to
  government
• Government must respond in writing within 2
  months (coordinated by HM Treasury who may also
  attend the hearing)

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Role of Department
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External Accountability - Role of Department

• Answer questions on what happened, why and what
  will change in the future
• Based on agreed facts (report clearance)
• Represented by the Accounting Officer
• Inquisitorial
• Department may provide supplementary evidence

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External Accountability Comptroller Auditor
General

• The CAG is
• appointed by the
  Queen
• on recommendation of
  Prime Minister
• with the agreement of
  Chairman of the
• Public
  Accounts Commission
• and approved by House
  of Commons
• 
  INDEPENDENT
• 
  and employs
• the
  National Audit Office

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Role of NAO
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External Accountability - Role of NAO (1)

• citizens MEETING THE
  GETTING THE
• auditors
  COST BENEFIT
• Holding to Wheres the
  How good is
• account Money gone?
  the Service?
• Helping to Could we get it
  Could we get
  
  Improve for less?
  better results?

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External Accountability - Role of NAO (2)

• For UK
• Annual audit of some 570 financial statements
• Prepare 60 Value for Money reports per year
• Prepare corporate governance reports
  (discretionary)
• Also
• European Union, International Audits and Capacity
  Building

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External Accountability - Role of NAO (3)

• Assist Parliament in holding government to
  account, primarily through PAC assurance and
  advice
• Relationship with PAC
• Provide analysed evaluated facts and advice to
  other Committees of the House of Commons
• Provide recommendations and advice to departments
  to improve practice

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External Accountability - Role of NAO (4)

• C AG determines VfM future programme
• His decision as informed by
• parliamentary
  public interest
• discussions
  with Departments
• horizon scanning previous
  knowledge
• Necessary corporate planning resourcing
• Schedule hearings in conjunction with Chairman

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External Accountability - Role of NAO (5)

• BEFORE the Hearing
• NAO prepares report, agrees facts with department
• Publishes report in Parliament issues press
  release
• Briefs the Chairman and Committee members
• AFTER the Hearing
• Drafts the Committees report
• Monitors progress
• Performs a follow up study if deemed necessary

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External Accountability Role of NAO
internationally

• Work with EU Contact Committee
• Work in conjunction with Westminster Foundation
  for Democracy
• e.g. Macedonia, Ukraine, parliaments
• Work through direct capacity building
• e.g. Slovenian parliament

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External Accountability Key Points

• Role of Parliament in holding Government to
  account, especially via
• Parliamentary Accounts Committee
  a Committee of the House
• Implementation rather than Policy focus
  attendance required
• C AG independent of
  government, an officer of the House,
• 
  liaison with Committee
• NAO remit, professionalisation, reputation
  through a track record
• Committee Meetings open, transparent, verbatim
  record, Press Public
• Government must
  respond in writing within 2 months
• Follow up
  as appropriate by NAO