§ (".—(1) In so far as such provision has not been made, Northern Ireland legislation shall make provision—
- (a) for proper accounts to be prepared by the Northern Ireland departments, and by other persons to whom sums are paid directly out of the Consolidated Fund of Northern Ireland, of their expenditure and receipts;
- (b) for the Department of Finance and Personnel to prepare an account of payments into and out of the Fund;
- (c) for the Comptroller and Auditor General for Northern Ireland to exercise, or ensure the exercise by other persons of, the functions mentioned in subsection (2);
- (d) for access by persons exercising those functions to such documents as they may reasonably require;
- (e) for members of the Northern Ireland Civil Service designated for the purpose to be answerable to the Assembly in respect of the expenditure and receipts of each of the Northern Ireland departments; and
- (f) for the publication of accounts prepared in pursuance of paragraphs (a) and (b), and of reports on such accounts, and for the laying of such accounts and reports before the Assembly.
§ (2) The functions referred to in subsection (1)(c) are—
- (a) issuing credits for the payment of sums out of the Fund;
- (b) examining accounts prepared in pursuance of subsection (1)(a) and (b) (which includes determining whether sums paid out of the Fund have been paid out and applied in accordance with section 55), and certifying and reporting on them;
- (c) carrying out examinations into the economy, efficiency and effectiveness with which the Northern Ireland departments have used their resources in discharging their functions; and
- (d) carrying out examinations into the economy, efficiency and effectiveness with which other persons determined under Northern Ireland legislation to whom sums are paid directly out of the Fund have used those sums in discharging their functions.
§ (3) Standing orders shall make provision for establishing a committee of members of the Assembly to consider accounts, and reports on accounts, laid before the Assembly in pursuance of this section or any other enactment.
§ (4) Subsection (2)(b) does not apply to accounts prepared by the Comptroller and Auditor General for Northern Ireland.").
§ The noble Lord said: My Lords, this amendment reproduces, with modifications, the provisions contained in Clause 66 of the Scotland Bill which lay down the essentials of audit control. It is the core provision of the amendments which we are making to the existing audit controls.
§ We are not following the Scotland Bill in every respect. The Scots are starting with a blank sheet of paper. Northern Ireland, in contrast, has audit legislation going back as far as 1921. It has a Comptroller and Auditor General and its own Northern Ireland Audit Office. The system has worked very successfully.
§ When the Bill was being discussed in another place, however, the chairman of the Public Accounts Committee raised a number of concerns about the controls. He pointed to the size of the subvention to the Northern Ireland Consolidated Fund (it is around 34 per cent.) and the possibility of paramilitary fraud. He argued that the UK taxpayer deserved stronger oversight of Assembly spending through parliamentary scrutiny.
§ We reject the notion of parliamentary scrutiny of Assembly spending because it runs counter to the principle of devolution. Parliament will vote money to the Assembly, after debate, and it will then be for the Assembly, answerable to the Northern Ireland electorate—a very important point—to decide how to spend that money. There should be no further control from Westminster.
§ But we do echo some of the PAC chairman's concerns. Chief among them is the possibility that the Assembly might at some future date dispense with some or all of its audit controls. Audit legislation is transferred and we cannot simply change its status. The Assembly must be free to modify it.
§ The solution we have adopted is to leave the Assembly free to change its audit controls provided that it keeps the basic standards which are set out in this clause and which, as I have said, closely follow the model adopted for Scotland. We do not seek to lay down the way it does so and we are not requiring it to change any of its existing legislation immediately. But it will not be able to legislate to reduce or undermine the existing controls and at some point it will have to introduce some additional features which are set out in this clause.
§ The basic standards of control will consist of: the independent Comptroller and Auditor General for Northern Ireland, who already exists and whose independence will be enhanced by other provisions in this Bill, notably Clause 62(2); the requirement for the preparation of proper accounts of expenditure and 695 receipts by direct recipients of money from the Northern Ireland Consolidated Fund, chiefly the Northern Ireland departments; the requirement for the Department of Finance and Personnel to prepare an account of payments into and out of the fund; the requirement for Northern Ireland departments to have accounting officers; the requirement for the accounts of recipients of direct funding from the Consolidated Fund to be audited with full access to necessary documents; and, finally, the requirements for accounts and auditor's reports to be published and laid before the Assembly.
§ Those controls—which I will again stress have existed in Northern Ireland for many years and have operated effectively; there has been remarkably little proven fraud—should provide this House and, I hope, Members in another place, with the reassurance that the money given to the Assembly will be properly spent and properly accounted for.
§ In addition to those controls, the Assembly will be required to set up the equivalent of a public accounts committee under standing orders. It will be the duty of this committee to consider accounts and reports of accounts laid before it by the Comptroller and Auditor General. The existence of the committee will enhance the accountability of the Comptroller and Auditor General and I hope that the new committee will follow the Westminster model in a rigorous scrutiny of public expenditure. I beg to move.
§ Lord Cope of BerkeleyMy Lords, I was put into an accounting and audit office at an early age. Although I got out of it after a few years and am now an extremely rusty accountant and auditor, that was my original training. I therefore have the greatest sympathy for the efforts of the Government to insert proper control and audit procedures into the Bill.
It is important that the Northern Ireland Comptroller and Auditor General should continue to function on the basis on which he has functioned over the past few years. Given the differences with the new Assembly and the new set up. I hope he will function to the high standards to which he has functioned over the past few years and in an equivalent manner to the way in which the Comptroller and Auditor General functions in the United Kingdom and, as it will be, in England and Wales for most matters.
It is, of course, a big constitutional change for this Parliament and particularly another place to give up responsibility for an enormous block of expenditure and hand it over to a different assembly. In doing so I think another place, which has played a historical role in it, needs the reassurance of a proper audit arrangement and a proper set up within which the Comptroller and Auditor General can function.
I am slightly nervous about leaving the Assembly free to alter the audit controls, although I realise that the provisions are limited, as the Minister stated. But this is a most important part of the Bill. Given the difficulties which may arise and to which I referred earlier in organising finance in Northern Ireland, compounded by the problems there have been in the Province as a result 696 of rackets and so on, it is important that the audit function is carried out rigorously and the proper arrangements set up for it to report to the Assembly in the manner which the new clause suggests. I therefore support the amendment.
§ On Question, amendment agreed to.
§ Clause 62 [Audit]:
§ Lord Dubs moved Amendment No. 86:
§ Page 31, line 3, after ("Minister") insert ("or Northern Ireland department").
§ The noble Lord said: This amendment frees the Comptroller and Auditor General from the direction and control of the Northern Ireland departments as well as those of the Assembly and Ministers. This is a necessary part of his independence. I beg to move.
§ Lord Cope of BerkeleyMy Lords, quite right too.
§ On Question, amendment agreed to.
§ Lord Dubs moved Amendment No. 87:
§ Page 31, line 8, after ("of") insert ("an Act of the Assembly or other").
§ The noble Lord said: My Lords, this is a drafting amendment. I beg to move.
§ On Question, amendment agreed to.
§ Lord Dubs moved Amendment No. 88:
§
Page 31, line 9, at end insert—
("( ) The Assembly shall not have power under Article 4(1) of the Audit (Northern Ireland) Order 1987 to pass at any time a resolution which reduces the salary payable to a person holding the office of Comptroller and Auditor General for Northern Ireland at that time.").
§ The noble Lord said: My Lords, this amendment represents an additional means of safeguarding the independence of the Comptroller and Auditor General for Northern Ireland from unwarranted interference by the Assembly.
§ Clause 62(2) was amended in Committee to provide explicitly that the Comptroller and Auditor General for Northern Ireland should not be subject to the direction or control of the Assembly except as regards the preparation of accounts. That establishes the principle. All this amendment does is to buttress it. The Assembly pays the Comptroller and Auditor General directly and sets the level of his salary annually. We tried to move away from the annual salary setting but for technical reasons were unable to do so. But the Comptroller and Auditor General's salary is subject to a statutory upper limit, which provides a degree of protection from the Assembly's using it to manipulate him. The amendment acts on the opposite end of the spectrum, to prevent the Assembly from undermining the Comptroller and Auditor General's independence by threatening a reduction in salary.
§ It is not a major provision, but I hope it will be a successful one. I beg to move.
§ On Question, amendment agreed to.
697§ Lord Dubs moved Amendment No. 89:
§ After Clause 62, insert the following new clause—