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

1. Public Sector Accountability and Auditing in the UKROLE OF NATIONAL AUDIT OFFICE&RELATIONSHIP WITH PARLIAMENTforDistinguished IRAQI Delegation18 June 2009 Bill Burnett, Director, International & Nigel Penny, International Manager & Project Leader

2. 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

3. 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

4. Overall - UK Government Administration • Role of Ministers • Set strategy and policy • Role of Civil Servants • Implement policy • Provide policy advice • Day to day administration

5. 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

6. The External Accountability Process: the Committee of Public Accounts Government requests and Parliament grant funds C&AG examines spending and reports to Parliament Government Response PAC session and report

7. UK Public Accounts Committee

8. The Committee

9. 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 Parliamentrather than Parties) • Unanimous reports – very rare for need of a vote

10. 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)

11. Role of Department

12. 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

13. External Accountability – Comptroller & Auditor General The C&AG is: appointed by theQueen 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

14. Role of NAO

15. External Accountability - Role of NAO (1) citizens MEETING THE GETTING THE auditors COST BENEFIT Holding to Where’s the How good is account Money gone? the Service? Helping to Could we get it Could we get Improve for less? better results?

16. 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

17. 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

18. 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

19. 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 Committee’s report • Monitors progress • Performs a follow up study if deemed necessary

20. 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

21. 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 upas appropriate by NAO