Office of the Comptroller and Auditor General Annual Report and Accounts 2022.

R.77/2023

Contents

Introductory Statement 3 Key Highlights  4 Performance Report 6

Vision, Purpose and Values 7

Strategy  8

Risks  10

Operations  14

Performance Analysis  18

Financial Performance 30 Accountability Report  32

Corporate Governance Report 33

Remuneration and Staff Report 40

Report of the Board of Governance of the Office of the Comptroller  41

and Auditor General to the States Assembly on the expenses of the

Comptroller and Auditor General

Independent Auditor's Report to the Comptroller and Auditor  42 General

Annual Accounts  45

The 2022 Annual Report and Accounts tells the story of the Office of the Comptroller and Auditor General (also known as the Jersey Audit Office, or JAO for short). It sets out the JAO's performance, governance arrangements and finances for the year and is designed to enable stakeholders to hold us to account.  

It sits alongside the Comptroller and Auditor General's Annual Report of Findings published in February 2023 which summarises findings and recommendations made by the Comptroller and Auditor General (C&AG) during 2022.

Introductory Statement

In January 2022 we published the Strategy for the Jersey Audit Office (JAO) for 2022-25. This was the first time the JAO had published a Strategy and we are committed to updating the Strategy on an annual basis. The updated JAO Strategy for 2023-26 was published in January 2023.  Throughout the period of the Strategy our ambitions remain constant – to be a high-performing audit organisation, support effective scrutiny and accountability, make a difference and build a better organisation.

2022 was a transitional year for the JAO as we started to work with the new States Assembly after the Election. We attended new States Members' events and prioritised our support for the newly formed Public Accounts Committee (PAC) in the autumn of 2022. We were also pleased that our Board of Governance was, once again, able to meet on-Island in October 2022. Board members were pleased to be able to meet key stakeholders while they were there.

During the pre-election period we took the opportunity to developing our new website. Following the General Election, we prioritised support for new members of the States Assembly and, in particular, the PAC.

The JAO continued to perform strongly in 2022. We met 12 of our 16 Key Performance Indicators (KPIs). Of the remaining four KPIs, two were partially met, one was not measured and one was not met. Benchmarking with other audit offices shows that we publish a high volume of reports at relatively low cost. The JAO continues to receive very positive feedback from officers and stakeholders. For 2023, we will prioritise areas for improvements, particularly in implementing our Corporate Social Responsibility Strategy. We will also strengthen our Board of Governance by recruiting an additional member.

Finally, we would like to say thank you to the JAO team of affiliates, particularly Stephen Warr en, the Deputy Comptroller and Auditor General. On 31 March 2023, Stephen left the JAO to become the first ever Tynwald Auditor General in the Isle of Man. Stephen has been a driving force for the JAO since joining in 2013 and thoroughly deserves this prestigious appointment. We look forward to working with him in his new role.

Lynn Pamment   Grace Nesbitt OBE C&AG  Board Chair

Reports issued in 2022

Quarter Three

States Employment Board - Follow Up

Quarter One Child and Adolescent Mental Health

Long-Term Care Fund Services

Quarter Two Quarter Four

Governance of the  Risk Management  - States of Jersey Police  Follow Up

- Follow Up

Annual Reporting

Cyber Security

Arrangements Grants to Arts, Heritage and Culture

Governance and  Organisations Decision Making

during the COVID-19

Pandemic

COVID-19 Test and Trace and Vaccination Programmes

Support to States Members

• All 20 PAC meetings supported

• States Members' induction session attended in June 2022

• PAC induction attended July 2022

• Briefings offered to all incoming Ministers and Scrutiny Chairs  

Sharing Good Practice

• 37 bodies attending Annual Reporting Workshop

• Annual Reporting Good Practice Guide published

• Thinkpiece on Governance and Accountability of Independent Bodies and Office Holders

Delivery against KPIs

KPIs met  KPIs  KPIs not  Direction

partly  met  of travel met or

not

measured

High performing audit  4  - -

organisation

• Sscurpuptiorny tianngd e acffeccoutiventa  bility 4  - -

• Making a difference 2 1  1   orBugilandiinsgata ionbe  tter  2  2  -

The Office of Comptroller and Auditor General (C&AG') was established in 2005 and operates under the Comptroller and Auditor General (Jersey) Law 2014. The C&AG has chosen to discharge her responsibilities through the Jersey Audit Office (JAO).

The Performance Report provides an overview of the work of the C&AG and the JAO in 2022. It considers

• The Vision, Purpose and Values of the JAO

• Strategy

• Risks

• Operations

• Performance Analysis

• Financial Performance

Vision, Purpose and Values

On 7 January 2022, the C&AG published the Jersey Audit Office Strategy 2022-25.

The four-year Strategy is updated each year on a rolling basis to run concurrently with the four-year Government Plan. The JAO Strategy 2023 - 2026 was published on 18 January 2023 and includes two additional planned actions:

• work effectively with other independent bodies and office holders (as part of supporting effective scrutiny and accountability); and

• compliance with principles and standards issued by the International Organisation of Supreme Audit Institutions (INTOSAI) (as part of building a better organisation).

The C&AG, with support of her Deputy , operates a risk register that captures those risks with the potential to have a significant adverse effect on the operation of the JAO. This risk register sets out the likelihood and impact of risks occurring, the mitigating arrangements in place and further mitigations planned. It is organised around key risk themes that relate to the four JAO priorities of high performing audit organisation, supporting effective scrutiny and accountability, making a difference and building a better organisation. The risk register is reviewed at each meeting of the Board of Governance.

After mitigating actions have been considered:

• finance, quality and economy, efficiency and effectiveness risks remain stable

• reputation risks have increased; and

• pandemic/epidemic disruption risks have decreased.

For the first time, the risk register also includes climate risks. During 2023, risk owners will be assigned to climate risks, mitigating actions and target dates will be agreed and risks will be quantified.

Key Risks ordered by theme

Risks  How we managed our risks during 2022

Finance  For 2022, risks relating to financial loss as a

Amber  Stable  result of fraud have been explicitly considered.

• Insufficient resources.  The States of Jersey are required by statute to

• Delays in making payments or processing  provide sufficient resources to the C&AG. Medium-term contracts for services to provide

financial information, inadequate budgetary

price stability.

information.

• Financial loss from fraud (for example, as a  Treasury and Exchequer service level agreement for making payments, processing

result of management override of controls).

financial transactions and providing budgetary information.

• Financial management function provided by an affiliate who has right of direct access to the Chair of Board of Governance in the event of any concerns. Board of Governance reviews budget reports. JAO's annual financial statements subject to external audit.

About the C&AG and the JAO

The role of the C&AG

The C&AG is appointed by the States Assembly and is independent of Government. Her responsibilities are to:

• report to the States Assembly on the effectiveness of internal control, general corporate governance arrangements and economy, efficiency and effectiveness (value for money'); and

• appoint auditors of the accounts of the States (including the Social Security Fund, the Social Security (Reserve) Fund, the Health Insurance Fund and the Long-Term Care Fund) and certain other specified entities.

She may not be directed in how she discharges her responsibilities. Her role is to evaluate the implementation of policy, but she does not question policy decisions.

Assurance about the stewardship of public funds

Reporting to the  Appointing States Assembly auditors of

accounts

Corporate  Other specified Internal control governance Value for money The States bodies

The Code of Audit Practice and the statutory framework

Statute requires that the C&AG publishes a Code of Audit Practice, setting out how she discharges her functions.  

Other legislation Comptroller and  relating to the Auditor General  appointment of (Jersey) Law 2014  auditors of financial statements

Code of Audit Practice

Professional standards and obligations

Letters of appointment of auditors appointed by the C&AG

Contracts where auditors have a direct contractual

relationship with the C&AG

Operating Model

The JAO comprises the C&AG, a   Deputy , a communications and  administration function, contract  staff and affiliates. Affiliates were  engaged following a competitive  recruitment process and provide  specialist knowledge and  experience where required. The  JAO has no employees.

On 31 March 2023, following 10  years of service, Stephen Warr en,  the Deputy C&AG resigned from his  role to become the first ever  Tynwald Auditor General in the Isle of Man. The C&AG has reassigned Stephen's responsibilities across the current pool of affiliates. The recruitment process for the appointment of a new Deputy Comptroller and Auditor General commenced in April 2023.

Environmental impact

The major environmental impact of the JAO is the use of air travel to and from Jersey.

The response to the COVID-19 pandemic together with the JAO's investment in technology, accelerated the extent to which the Board of Governance, C&AG, the Deputy C&AG and affiliates worked from home. This has significantly reduced the JAO's carbon footprint compared to pre-pandemic levels and contributes to the United Nations Sustainability Goal 13 on Climate Action.

However, the C&AG also recognises the importance of face to face interactions and meetings. As a result, the JAO's use of air travel in 2022 was, as expected, higher than in 2021. The C&AG has identified climate related risks as a key theme in the JAO risk register and set out potential mitigating actions including reviewing the JAO delivery model.

Corporate Social Responsibility

The JAO seeks to be socially responsible. It supports the Universal Declaration of Human Rights set out by the United Nations, the benefits of diversity and the fight against corruption and bribery.

The JAO Corporate Social Responsibility Strategy considers how the JAO can contribute to better community, environmental and economic wellbeing outcomes for the Island. It is not the role of the JAO to contribute to all of the outcome statements, outcome indicators and outcome measures within the States of Jersey Performance Framework. A principle of the JAO Corporate Social Responsibility Strategy however is that the JAO should contribute to each of the three overarching wellbeing themes identified in the Jersey Performance Framework:

• Community wellbeing - the quality of people's lives

• Environmental wellbeing – the quality of the natural world around us; and

• Economic wellbeing – how well the economy is performing.

The JAO made some progress in implementing its Corporate Social Responsibility Strategy during 2022, but we recognise that there is more to do.

The JAO Strategy 2022-25 set out the priorities for the JAO in 2022. The table below shows how the JAO has performed against these priorities.

Performance against KPIs

Senior officer and stakeholder feedback

The C&AG sought feedback on her performance and the performance of the JAO from senior officers and stakeholders (States Members, lay members of the PAC and members of the Government of Jersey Risk and Audit Committee). The 2022 surveys were carried out in January and February 2023 and, for the first time, were also sent to a further tier of officers and other stakeholders. The feedback from these wider groups provides useful additional management information. However, the results are not materially different from the original groupings and, for consistency of comparison to prior years, the extended groups have not been included in the 2023 data reported below.

Officers were requested to score performance across eight criteria on a scale of 1 (strongly disagree) to 5 (strongly agree). The results of this feedback are summarised below and show strong performance in most areas. Specific work is planned for 2023 to develop and strengthen further our performance in areas that have not scored as well as in previous years.

I have sought feedback from the C&AG and/or the Jersey Audit Office on governance, value for money and internal

control issues.

I have used insights from the work of the C&AG to help the

States of Jersey improve.

Recommendations made by the C&AG have led to, or are likely to lead to, improvements in the States of Jersey.

C&AG reports demonstrate an independent balanced

judgement.

The technical quality of reports issued by the C&AG is

good.

The C&AG and JAO team bring a deep and accurate understanding about wider management issues beyond financial management and control matters.

The C&AG and JAO team have a deep and accurate understanding of the wider context in which the States of Jersey works.

The C&AG and JAO team's knowledge of the public sector

in Jersey is good.

My relationship with the C&AG and the Jersey Audit Office

(JAO) is good.

1 2 3 4 5 2020 2021 2022

Stakeholders were surveyed on the extent to which the C&AG demonstrates the values of the JAO. Stakeholders were requested to provide an assessment against each of eight statements (with strongly disagree scoring 1 and strongly agree scoring 5). The results of this feedback are summarised below.

Feedback from States Members, lay members of the PAC and members of the Government of Jersey Risk and Audit Committee

The C&AG has responded with agility to the changing

environment the year.

The C&AG builds and maintains trust. The C&AG acts with honesty and integrity.

The recommendations of the C&AG drive constructive and

positive change.

The work of the C&AG delivers high quality outcomes. The C&AG provides insight and promotes best practice.

The C&AG is impartial and independent in the way she

undertakes her work.

The C&AG and the Jersey Audit Office are accessible,

transparent and responsive.

1 2 3 4 5 2020 2021 2022

Auditors appointed by the Comptroller and Auditor General

The C&AG appoints firms of accountants to audit the accounts of the States and certain other specified bodies. Annually, the C&AG seeks, obtains and evaluates feedback from the bodies to which she appoints auditors on the auditors' performance and engagement. Audited bodies are requested to score auditors across ten criteria on a scale of 1 to 5 (with 5 being strong performance). Auditors received high scores from all respondents.

Performance of appointed auditors

Audit recommendations Relationship with Those Charged with Governance

Relationship with management Technical knowledge

Audit planning Audit of significant risks

Efficiency Challenge to management Knowledge of the business Independence

1 2 3 4 5 2020 2021 2022

In accordance with contractual terms, the C&AG reviewed and, where appropriate, approved requests to carry out non-audit services made by the audit firms that she had appointed. She only did so where she was satisfied that performing such work would not give rise to an actual or perceived threat to the independence of the audit firm or to the C&AG.

The ICAEW was engaged during 2022 to undertake file reviews of the quality of two audit engagements. The ICAEW grades file reviews on a four-point scale:

1.  Good  2.  Limited Improvements Required

3.  Improvements Required 4.  Significant Improvements Required

The ICAEW graded both audits selected for review as 'Limited Improvements Required'.

Comparing performance with other audit offices

In each of our Annual Reports from 2017, the C&AG has compared the performance of the JAO with seven other audit offices. The group comprises audit offices from British Overseas Territories, Canadian provinces, Australian states and territories and an independent country, with populations ranging from 68,000 to 570,000.  

There are limitations in making comparisons because of differences in the responsibilities of the audit offices, their business models, prevailing costs in the economy, budgetary arrangements and applicable accounting frameworks. However, the results from our 2022 analyses show the same as in previous years: the JAO provides a significant volume of reports to the States Assembly, particularly when compared to relative populations.

18 16 14 12 10 8 6 4 2 0

6 7 JAO 5 2 3 1 4

12 10 8 6 4 2

0

JAO 6 3 7 2 5 1 4 Source: JAO analysis

Since 2021, the JAO has been a member of the EURORAI and this has provided us with further benchmarking data on the cost of audit offices compared to government expenditure. The combined analysis of JAO costs to the original group of seven and the 18 EURORAI members with fewer than 50 staff shows that the JAO's costs are in the middle of the range.

0.40% 0.35% 0.30% 0.25% 0.20% 0.15% 0.10% 0.05% 0.00%

6 4 3 5 2 7 1

E1 E2 E9 E4 E8 E7 E5 E6 E3

E10 E17 E13 E15 E12 E14 E16 E11 E19 E18

JAO

Source: JAO analysis

Website and communications

In the run up to the general election period, the JAO observed the pre-election period' by restricting its activities and public announcements so as not to influence voters. During the pre-election period, the C&AG developed and, following the general election, launched, an updated website. This included improved tools together with summaries and links to all past C&AG reports.

In 2022, the number of users of the JAO website decreased slightly compared to 2021, but the number of sessions and unique page views both increased.

Website statistics

Unique page views

Sessions

Users

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

2019 2020 2021 2022

Source: JAO analysis

When reports are issued by the C&AG they are sent individually to all States Members as well as to the lay members of the PAC, senior Government officers, the Board of Governance and the press. They are also submitted to the States Assembly and are published on the States Assembly website as well as the JAO website. Since July 2020, the C&AG has monitored the downloads of reports from the JAO website. During 2021, 1,592 pdf documents were downloaded from the website, mostly reports or project specifications. This compares to 3,662 pdf downloads in 2021 and 1,554 in 2020.

Resources for the C&AG are allocated through the Government Plan.

Over the last eight years the JAO's expenditure has increased by £207,000 which, after allowing for inflation, represents a 2% increase in real terms. The main cost pressure during this period has been in respect of the audit of the accounts of the States of Jersey and other entities. This reflects:

• increased costs within the audit market as a whole; and

• greater focus by the C&AG on assessing the quality of work carried out by appointed auditors.

The C&AG mitigates the impact of audit fee pressures by subjecting all audit appointments to competitive tendering.

Financial Performance 2015 to 2022

£1,200,000 £1,000,000

£800,000 £600,000 £400,000 £200,000

£0

2015 2016 2017 2018 2019 2020 2021 2022

Final budget Actual on a comparable basis

Source: JAO Audited Annual Accounts 2015 to 2022

For 2022, the C&AG achieved an underspend of £8,600 representing 0.9% of the allocated budget of £975,000. This saving was achieved through lower than expected costs in a number of areas including:

• Deputy Comptroller and Auditor General and Affiliate costs; and

• accommodation costs.

A detailed breakdown of the C&AG's costs in 2022 is set out below. Further information on the financial performance is provided in the Annual Accounts.

Other costs:

accommodation -

related, £25,100 Chairman of the Board Other costs: general,  of Governance, £2,000

£59,100

Comptroller and Auditor General,

£109,800 Audit of the accounts of

the Office of the

Comptroller and

Auditor General, £7,600

Employee and similar Audit of the accounts of  costs: other, £339,200

the States of Jersey,

£423,600

Source: JAO Audited Annual Accounts 2022

Section 2: Accountability Report

The Accountability Report provides key accountability information to the States Assembly. It comprises:

• the Corporate Governance Report which describes the JAO's governance structures and how they support the achievement of its objectives.

It contains the C&AG's Report, the Statement of Responsibilities of

the C&AG and the Governance Statement

• the Remuneration and Staff Report which provides information

about the remuneration paid to the C&AG, the Deputy C&AG,

the Chair of the Board of Governance and independent

contractors working for the JAO; and

• the Accountability Statement and Audit Report which

bring together two further reports that form a key part of

the C&AG's and JAO's accountability. These are the

Board of Governance report on the C&AG's expenses

and the JAO's independent auditor's report on

the annual accounts.

Comptroller and Auditor General's Report

I was appointed as C&AG on 1 January 2020 and personally direct the activities of the JAO with the support of the Deputy C&AG.

The Board of Governance of the Office of the Comptroller and Auditor General comprises a chair, two independent members and the C&AG (ex officio). During 2022, the post holders were:

• Grace Nesbitt OBE (Chair)

• Professor Russel Griggs OBE (Senior Independent Member)

• Mr Robert Tinlin MBE (Independent Member)

• Lynn Pamment (C&AG).

All members of the Board of Governance have to complete a declaration of interests.

No Board members declared significant company directorships or other interests that might have conflicted with their responsibilities. No member of the Board had any other related-party interests.

Statement of Responsibilities of the Comptroller and Auditor General

Under the Comptroller and Auditor General (Jersey) Law 2014, the C&AG is required to prepare annual accounts. The accounts are prepared on an accruals basis.

I confirm that, as far as I am aware, there is no relevant audit information of which the external auditors are unaware. I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the external auditors are aware of that information. In preparing these accounts, I have adopted International Public Sector Accounting Standards issued by the International Public Sector Accounting Standards Board and, in particular, I have:

• observed the relevant accounting and disclosure requirements and applied suitable accounting policies on a consistent basis

• made judgements and estimates on a reasonable basis; and

• prepared the accounts on a going concern basis.

I confirm that this Annual Report and Accounts as a whole is fair, balanced and understandable.

Governance statement

My responsibilities

The C&AG has responsibility for maintaining effective governance and a sound system of internal control that supports the achievement of the JAO's policies, aims and objectives, while safeguarding the public funds and assets.

How the C&AG discharges her responsibilities

Given the small size of the JAO, the C&AG performs her functions without a formal management team. In her absence she delegates her responsibilities to the Deputy C&AG.

The C&AG secures an effective system of governance and a sound system of internal control including by:

• preparing, communicating and implementing appropriate policies and procedures, in areas such as complaints and data security

• to the extent appropriate to the circumstances of the JAO, using the corporate financial and other systems of the States of Jersey. For financial systems, a service level agreement is in place. Using such systems means that the JAO does not maintain its own bank account with the attendant risks

• monitoring expenditure against budget

• seeking professional advice from the States where necessary and appropriate, including from the Law Officers' Department and the States' corporate procurement team

• maintaining a contracts register and a gifts and hospitality register; and

• reviewing the performance of the appointed auditors.

Risk management

The C&AG with support of her Deputy operates a risk register that is reviewed at each meeting of the Board of Governance.

Personal data related incidents

There were no protected personal data related incidents reportable to the Office of the Information Commissioner in 2022 for my Office. Neither were there any other personal data related incidents.

The Board of Governance

The Board of Governance, established under the Comptroller and Auditor General (Board of Governance) (Jersey) Order 2015 (the 2015 Order'), is responsible for keeping under review whether the resources provided to the C&AG by the States Assembly have been and are being used properly, efficiently and effectively. The Order provides for the membership of the Board to comprise two or three independent members appointed by the States, plus the C&AG, with a quorum of the C&AG and at least two independent members. Independent members of the Board are appointed by the States Assembly for four year terms and may not serve more than two terms.

On 26 January 2023, the Chief Minister, at the request of the Board of Governance and with the agreement of the Chair of the Public Accounts Committee, amended the 2015 Order. The Order was amended to:

• increase the maximum number of independent members to four

• increase the length of each term of appointment to up to five years; and

• set the maximum aggregate term length for which members may be appointed as nine years, rather than two terms.

The amendments were intended to provide the Board with greater flexibility, particularly during transition periods as Board members reach the end of their terms of office and new members are appointed. The Board is looking to recruit an on-Island person as a fourth independent member of the Board.

The Board has been keen to develop its engagement with the local community and to play a role in leadership development. In parallel with the Government of Jersey's Board Apprentice programme the Board appointed its own Board Apprentice in March 2023.

Profiles of Board of Governance members

Grace was a senior human resources professional in the Northern Ireland Civil Service. Before she retired she was responsible for Public Service and Civil Service Pensions with 100 staff and a budget of £300 million.

Grace is also an independent member of a public sector audit committee and a director of a social enterprise company which provides training and work opportunities for disadvantaged adults.

 Grace Nesbitt OBE

Chair

Russel is an experienced business professional and has worked in a number of large private businesses as well as in large organisations and projects in the public sector.

He has held a wide range of executive and non-executive roles in private, public and charitable institutions, including the Lending Standards Board, Scott ish Mines Restoration Trust, Marie Curie Cancer Trust and the Audit

Professor Russel  Committee of the Department of Employment and Learning in Northern

Griggs OBE  Ireland. He was previously a Board member of Audit Scotland and Chair of its Independent  Remuneration Committee. Russel is currently Chair of South of Scotland Member  Enterprise.

Rob has had a successful career in local government, serving in both Scott ish and English councils. He is a Chartered Town Planner but much of his career has been in corporate governance. He held the post of Chief Executive for both South Northamptonshire Council and Southend-on-Sea Borough Council.

Rob is a non-executive director with the Crown Office and Procurator Fiscal Robert Tinlin MBE  Service, on its Executive Board, Business Improvement Committee and

Independent  Chairing its Audit & Risk Committee. He has served on a range of public Member  organisations including as a board member of NHS Digital and as a member of its remuneration, management and audit and risk committees.

Prior to her appointment as C&AG, Lynn was a lead partner in PwC UK's Government and Public Sector Assurance practice where she gained over 30 years' experience of working in an assurance and advisory capacity with public and private sector organisations in the UK and beyond. She was also PwC's Cardiff Office Senior Partner responsible for PwC's practice of over 250 professional staff in Wales.

Lynn Pamment  Lynn is a first class honours graduate from Cardiff University. She is a prize Comptroller and  winning member of the Institute of Chartered Accountants in England and

Auditor General  Wales (ICAEW) and is also a member of the Chartered Institute of Public

and ex officio  Finance and Accountancy (CIPFA).

member of the  Lynn is a UK member of the International Public Sector Accounting Standards

Board

Board and is the Chair of the Financial Reporting Advisory Board to UK HM Treasury.

The Board is responsible for:

• scrutinising the use of resources by and the governance arrangements of the C&AG

• reporting any concerns to the Chief Minister and the Chair of the PAC

• if requested by the Chair of the PAC, advising on the appointment of auditors of the accounts of the C&AG

• reviewing any estimates submitted by the C&AG to the Chair of the PAC for the purposes of the Medium-Term Financial Plan or the budget

• reviewing the audited accounts of the C&AG; and

• if requested by the C&AG, advising on the appointment, remuneration and terms and conditions of the Deputy C&AG.

The Board also has a power to prepare an assurance report on the expenses of the C&AG. How the Board of Governance discharged its responsibilities

The Board met three times during 2022, including one on-Island meeting. While on-Island Board members met key stakeholders including the Chief Minister, members of the PAC and the Chief Executive. All members of the Board attended all meetings. During 2022, the Board:

• reviewed the JAO risk register

• monitored the financial performance of the JAO, including the expenses incurred by the C&AG

• reviewed the gifts and hospitality register maintained for the JAO

• received and reviewed the report from the external auditors appointed by the Chair of the PAC on the JAO accounts; and

• approved an assurance statement on the C&AG's 2021 expenses. For 2022, the Board has prepared an assurance statement for the C&AG's 2022 expenses and this is included within this Accountability Report.

The Board did not report any matter to the Chief Minister and Chair of the PAC.

The Board continued to implement its action plan, based on a review commissioned by the Board and carried out by the UK National Audit Office, to improve its own effectiveness. The National Audit Office issued its final report in April 2020. In the concluding remarks it noted that the Board has made a good job of establishing itself, fulfilling its baseline functions at low cost, and it continues to evolve.' The National Audit Office set out areas where it felt that the Board could build on its trajectory of continuous improvement'. These included:

• diversity, roles and succession planning

• strategic ambition and performance indicators

• refining the remit of the Board; and

• evaluation of the Board and individual members.

Following the Board's annual strategic review in October 2022, the Board concluded that all actions had been implemented or were in hand.

Public Finances Manual

The Public Finances Manual (PFM) sets out best practice, high level principles and requirements for financial management of the States of Jersey. In consultation with the C&AG, a new section was published in 2022 to set out specific considerations for the JAO. The JAO is currently updating its suite of policies and procedures to reflect fully this new PFM section. In the meantime, the JAO has continued to adopt policies and procedures that comply with the PFM requirements.

Quality of data used

Both the Board of Governance and the C&AG rely on financial information drawn from the States of Jersey's financial systems that are subject to review and scrutiny by the Deputy C&AG and an affiliate working for the C&AG. Both the Board of Governance and I are satisfied that such financial information is acceptable for the purposes for which it is used.

Review of effectiveness

I have responsibility for reviewing the effectiveness of the system of internal control. My review is informed by my own work, the work of those working for me, the work of the Board of Governance and information received from the States. Based on that review I am satisfied with the arrangements in place for governance, risk management and internal control.

Significant internal control weaknesses

I am able to report that there were no significant weaknesses in the JAO's system of internal controls in 2022 that affected the achievement of the JAO's key policies, aims and objectives.

The Corporate Governance Report has been signed on 10 May 2023.

Lynn Pamment

Comptroller and Auditor General

Remuneration and Staff Report

During 2022, the JAO relied on the services of fourteen independent contractors, including the C&AG and the Deputy C&AG.  The JAO has no employees.

Fees paid to independent contractors

Independent contractor Fees paid 2022 £  Fees paid 2021 £ Comptroller and Auditor General 109,800  106,900 Deputy Comptroller and Auditor General 85,700  82,100 Other independent contractors 253,500  240,600 Total  449,000  429,600

The remuneration of independent contractors comprises only fees; they do not receive any bonuses, non-cash benefits or pension benefits. The C&AG is remunerated at a daily rate under the terms of a contract entered into on behalf of the Chief Minister and the Chair of the PAC. The Deputy C&AG and other independent contractors are remunerated at daily rates under the terms of contracts entered into by the C&AG. All remuneration is subject to oversight by the Board of Governance as part of its statutory duties.

The remuneration of the Chair of the Board of Governance is determined by the States Assembly. Board of Governance independent members are not remunerated.

Remuneration of the Chair of the Board of Governance

Chair  Fees paid 2022 £  Fees paid 2021 £ Peter Price (to 13 March 2021)  417 Grace Nesbitt OBE (from 14 March 2021)  2,000  1,583 Total  2,000  2,000

No payments in compensation for loss of office were made in the year and no payments were made to any office holder who was not in post during the year.

The Remuneration and Staff Report has been signed on 10 May 2023.

Lynn Pamment

Comptroller and Auditor General

Report of the Board of Governance of the Office of the Comptroller and Auditor General to the States Assembly on the expenses of the Comptroller and Auditor General

Article 5(7) of the Comptroller and Auditor General (Board of Governance) (Jersey) Order 2015 provides that the Board may prepare an assurance report upon the annual expenses of the Comptroller and Auditor General.

Scope of our work

We have through the course of 2022 and in preparing this statement:

• obtained an understanding of the controls and processes in place over the expenses incurred by and on behalf of the Comptroller and Auditor General for travel and subsistence

• received an analysis of the expenses incurred by and on behalf of the Comptroller and Auditor General for travel and subsistence for the year ended 31 December 2022

• assessed the reasonableness of those expenses in light of the role of the Comptroller and Auditor General

• sought explanations for any unusual items; and

• evaluated the reasonableness of such explanations.

Statement

No matters have arisen from our work that we wish to draw to the attention of the States Assembly.

Grace Nesbitt OBE

Chair

For and on behalf of the Board of Governance of the Office of the Comptroller and Auditor General

10 May 2023

Comptroller and Auditor General

Opinion

We have audited the financial statements of the Office of the Comptroller and Auditor General (the Office of the C&AG') for the year ended 31 December 2022 which comprise the Statement of comprehensive net expenditure, Statement of financial position, Statement of comparison of budget and actual amounts and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Public Sector Accounting Standards (IPSAS).

In our opinion, the financial statements:

• give a true and fair view of the state of the Office of the C&AG's affairs as at 31 December 2022 and of its total comprehensive net expenditure for the year then ended;

• are in accordance with International Public Sector Accounting Standards; and

• are in accordance with the requirements of the Comptroller and Auditor General (Jersey) Law 2014.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements' section of our report. We are independent of the Office of the C&AG in accordance with the ethical requirements that are relevant to our audit of the financial statements in Jersey, including the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information

The Comptroller and Auditor General is responsible for the other information. The other information comprises the information included in the Annual Report and Accounts', other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material

Comptroller and Auditor General

misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of the Comptroller and Auditor General for the financial statements

As explained more fully in the Corporate Governance Report set out from Page 33 of the Annual Report and Accounts, the Comptroller and Auditor General is responsible for the preparation of the financial statements which give a true and fair view in accordance with the Comptroller and Auditor General (Jersey) Law 2014, and for such internal control as the Comptroller and Auditor General determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Comptroller and Auditor General is responsible for assessing the Office of the C&AG's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Office of the C&AG's internal control.

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• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Office of the C&AG's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Office of the C&AG to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Use of our report

This report is made solely to the Comptroller and Auditor General, in accordance with Article 19 of the Comptroller and Auditor General (Jersey) Law 2014. Our audit work has been undertaken so that we might state to the Comptroller and Auditor General those matters we are required to state to her in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Comptroller and Auditor General for our audit work, for this report, or for the opinions we have formed.

Grant Thornton Limited Chartered Accountants

St Helier, Jersey

10 May 2023

Office of the Comptroller and Auditor General:

Annual Accounts for the year ended 31 December 2022

Statement of comprehensive net expenditure For the year ended 31 December 2022

Notes  2022  2021

Expenses  £  £ Employee and similar costs: Chairman of  2,000  2,000

the Board of Governance

Employee and similar costs: Comptroller  109,800  106,900 and Auditor General

Employee and similar costs: other  4  339,200  322,700 Other costs: audit of the accounts of the  5  423,600  384,800

States of Jersey  

Other costs: audit of the accounts of the  7,600  7,000 Office of the Comptroller and Auditor

General  

Other costs: recruitment to Board of  0  0 Governance  

Other costs: general 6  59,100  41,200 Other costs: accommodation-related   7  25,100  27,600 Total comprehensive net expenditure  966,400  892,200

Statement of financial position