Public Accounts Committee - Approved Committee Minutes - 30 April 2007

PM/KAK/138.07 48

PUBLIC ACCOUNTS COMMITTEE (15th Meeting)

30th April 2007

PART A

All  members  were  present,  with  the  exception  of  Mr.  A.  Grimes,  from  whom apologies had been received.

Deputy S.C. Ferguson

Senator J.L. Perchard

Connétable T.J. du Feu of St. Peter

Connétable D.J. Murphy of Grouville

Deputy A. Breckon

Deputy J.G. Reed R. Bignell C. Evans M. Magee

Advocate A. Ohlsson

In attendance -

C. Swinson, O.B.E., Comptroller and Auditor General

P. Monamy, Clerk to the Public Accounts Committee

Note: The Minutes of this meeting comprise Part A only.

Minutes. A1. The Minutes of the meeting held on 29th January and 19th March 2007, having

been previously circulated, were taken as read and were confirmed.

Matters arising. A2. The Committee noted the following matter arising from its previous Minutes -

Property Services Department: information on processes and procedures adopted for the disposal of property (Minute No. A6 of 19th March 2007)- The Committee noted that correspondence, dated 20th April 2007, had been received from the Director of Property Holdings in response to its request for information. It was noted that the approach presently adopted by Property Holdings in respect of commercial property expertise was to engage specific expertise  from  the  private  sector  as  and  when  required. Whereas  it  was recognised that a service-type Board' was envisaged for Property Holdings in the future, concern was expressed at the apparent lack of foresight regarding the evolving situation in respect of the Waterfront Enterprise Board (WEB) and the move to widen its remit. Also, whilst there was to be involvement by the Ministers for Treasury and Resources, Transport and Technical Services, Economic  Development,  and  Planning  and  Environment,  and  also  the Connétable of St. Helier , in the proposed "Jersey Property Enterprises", it was noted that no politicians would be on the Executive Board. The Comptroller and  Auditor  General  confirmed  that,  although  the  Committee had  not  yet examined agreements with developers, issues of governance, etc., WEB was not  currently  on  the  work  programme. It  was  emphasised  that  while  the Committee  was  able  to  examine  historic  arrangements,  care  needed  to  be exercised  as  regards  the  issues  being  considered  to  be  prospective arrangements - which might be termed work in progress.' In any event, an investigation by the Comptroller and Auditor General at the same time as an examination  by  the  Minister  for  Planning  and  Environment  might  not  be desirable and less than ideal. The Chairman confirmed that in any event the issues surrounding "the Property Plan/Property Holdings" were to be returned to by the Committee later in 2007. Senator Perchard and Advocate Ohlsson

declared their respective conflicts of interest in this matter.

Chairmen's A3. The  Committee  received  an  oral  report  from  the  Chairman  regarding  the Committee. Chairmen's Committee.

511/1(2)

The Committee recalled that the States had, on 28th March 2007, appointed Deputy Ferguson as President of the Chairmen's Committee.

Public Accounts A4. The  Committee  considered  a  draft  report  reviewing  the  reports  of  the Committee report Comptroller  and  Auditor  General  on  the  Jersey  Financial  Services  Commission reviewing C&AG (JFSC), Overseas Aid and his Notes on States' Aggregate Expenditure.

Reports on JFSC,

Overseas Aid and The Committee noted that Mr. Grimes had commented on the report on the JFSC, Notes on States' which was to be asked to provide evidence of value for money' in relation to the Aggregate delivery of its services. It was agreed that the current understaffing of the JFSC Expenditure. needed to be addressed with some urgency so that they would be able to prepare for 512/2(3) and host the International Monetary Fund (IMF) review in 2008. It was unclear to

the Committee whether the same approach adopted by the IMF in reviewing some offshore jurisdictions (such as the Cook Islands) was entirely appropriate for Jersey, given the differing circumstances of each. It appeared that there was little tolerance' in the standards adopted by the IMF and that this was a matter of concern to the JFSC.

In relation to the report on Overseas Aid, the Committee agreed that it would be appropriate  for  an  independent  approach  to  be  taken  in  the  administering  of expenditure which fell outside the normal arrangements for managing public finance.

In the absence of conclusions in the Notes on States' Aggregate Expenditure, the Committee  agreed  to  highlight  certain  issues  to  be  addressed,  including  the possibility that some services might be able to be provided better and/or cheaper in the private sector, and the need for all areas within the public administration to examine both existing and proposed services with this in mind. It was recognised that nice  to  have' expenditure  should  be  avoided,  although  precisely  how  to determine which services would and would not be implemented remained unclear.

Members were asked to convey their comments upon the draft report to the Chairman as soon as possible.

Comptroller and A5. The Committee received an oral report from the Comptroller and Auditor Auditor General: General regarding the under-mentioned work currently in hand and noted that - report.

512/1(8) (a) issues associated with the suggestion that it would be appropriate for the

Jersey Overseas Aid Commission to become a non-departmental entity (possibly under the auspices of the States Greffe) in order to comply with the normal arrangements for monitoring public finance, had raised concerns  amongst  a  number  of  prospective  Accounting  Officers. However, it was apparent that it would be preferable for States' policy in relation to "Grants" to be adhered to, and that this would necessitate changes to the way in which the Commission operated;

2. in relation to a review of the 2 main confiscation funds (Drug Trafficking Confiscation Fund and Criminal Offences Confiscation Fund), most of the  work  had  been  completed. Whereas  all  the  monies  had  been accounted for, some difficulties remained- particularly in relation to the original aims of the respective funds. Whereas decisions of the former Finance and Economics Committee regarding expenditure relating to the Law  Officers' Department  and  to  Community  Safety  had  been examined, difficulties arising from the present arrangements had been apparent, with issues of governance remaining unclear. Whilst both the Attorney General and the Viscount remained unhappy with the funding pattern  which  had  been  established  (whereby  almost  50 per  cent  of

certain expenditure was provided by the Confiscation Funds, which tended to

be rather more substantial than elsewhere), the distortion arising from the allocation of the funding in this way was recognised to have been a political decision. The Comptroller and Auditor General reported that whereas the use of such Funds to provide grants to the States of Jersey Police for security purposes was unexceptional in terms of processes adopted in other jurisdictions, it would have been preferable for issues of transparency' to have been addressed at the time of the move to Ministerial government. The Committee noted that a separate report was to be produced on each of the major Funds;

3. the review of the major States' pension schemes was taking some time to complete, although it was expected that the report would be published during  June  2007. It  was  evident  that  the  Public  Employees Contributory  Retirement  Scheme  (PECRS)  and  the  Teachers' Superannuation  Fund  were  in  somewhat  different  situations. It  was noted that part of the review dealt with the provision of legal advice regarding the separation of PECRS from States' funds, and the decision of the States in 1999 that this should be implemented. It was recognised that no advice on the matter had yet been forthcoming from the Attorney General. Advocate Ohlsson declared a conflict of interest;
4. a review was underway in relation to the Jersey Opera House, although some  difficulty  had  been  experienced  in  relation  to  the "Phoenix Trust" - the Trust Deed for which had not been made available to the Comptroller and Auditor General;
5. a review of the policy established for the provision of Nursery Education in the Island had almost been completed, from which it was apparent that a graded extension of the policy had been implemented without regard to the long-term financial consequences. It was noted that no funding provision had been made for the future liability arising from a 100 per cent take-up of the nursery provision to be offered;
6. a review was to be undertaken of the commission of I.T. (Information Technology) software for States purposes;
7. a report on "Planning for the States of Jersey Accounts 2006" was to be published  in  May  2007. The  Committee  agreed  that  following  its meeting on 25th June 2007 it was minded to hold a public hearing for interviews of the Treasurer of the States and the Accounting Officers for Health  and  Social  Services,  Education,  Sport  and  Culture,  Home Affairs, and Social Security (in relation to supplementation). It was further agreed to appoint the following members to lead the questioning on the under-mentioned subjects -

Health Deputy Reed and Advocate Ohlsson Education Connétable du Feu and Mr. Grimes Home Affairs Connétable Murphy and Mr. Evans Social Security Senator Perchard and Mr. Magee.

In addition, Deputy Breckon would cover other issues.

8. a review of the Planning and Environment Department was programmed for July 2007, with the management and other structures to be examined and the department's overall capability assessed and reported on.