Public Accounts Committee - Approved Panel Minutes - 16 June 2008

NG/JAC/172 110

PUBLIC ACCOUNTS COMMITTEE (32nd Meeting)

16th June 2008

PART A

All members were present, with the exception of Senator L. Norman, Connétable T.J. du Feu and Mr. C. Evans, from whom apologies had been received. Mr. R. Bignell was present for parts of items A5 and A8 and all others. Advocate A. Ohlsson was present for items A1 to A9 but only part of A6.

Deputy S.C. Ferguson, Chairman Connétable D.J. Murphy

Deputy A. Breckon

Deputy J.G. Reed R. Bignell A. Grimes

13. Magee

Advocate A. Ohlsson

In attendance -

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

14. Guillou, Clerk to the Public Accounts Committee

P. Monamy, States Greffe

Note: The Minutes of this meeting comprise Part A and Part B.

Minutes. A1. The Minutes of the Meeting held on 12th May 2008 (Part A and Part B),

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

Resignation of A2. The Chairman informed the Committee that due to personal circumstances, Connétable T.J. Connétable T.J. du Feu would be tendering his resignation from the Committee. du Feu. The Committee endorsed the sentiments expressed by the Chairman in appreciation

of his contributions to the Committee's work. The Chairman was requested to write to the Connétable to convey the Committee's thanks.

States of Jersey A3. The  Committee  considered  the  allocation  of  individual  members  to 2007 Financial responsibility for certain reports and accounts for the upcoming hearings regarding Report and the States of Jersey 2007 Financial Report and Accounts. It was noted that - Accounts -

Individual The Chairman had been assigned to the Comptroller and Auditor General's reports members' entitled "Setting the Scene - States' Spending Review" and "£35 million cost responsibilities512 reductions.  States' Spending  Review" and  the  accounts  of  the  Treasury  and (3) Resources and Chief Minister's Departments.

Deputy J.G. Reed had been assigned to the Comptroller and Auditor General's reports entitled "Setting the Scene - States' Spending Review", "£35 million cost reductions. States' Spending Review", as well as the annual reports of the Health and Social Services and Planning and Environment Departments. The Deputy was also allocated responsibility for the accounts of the Health and Social Services and Planning and Environment Departments.

Deputy A. Breckon had been assigned to the annual reports of the Health and Social Services, Education, Sport and Culture, and Law Officers' Departments and the accounts of the Health and Social Services; Housing; and Education, Sport and Culture Departments.

Senator L. Norman had been assigned to the annual reports of the Law Officers', Home  Affairs,  and  Planning  and  Environment  Departments,  along  with  the accounts  of  the  Economic  Development,  Home  Affairs,  and  Planning  and Environment Departments.

Connétable  D.J.  Murphy  had  been  assigned  to  the  Comptroller  and  Auditor General's report entitled "Pension Schemes for States' Employees" along with the annual report of the Education, Sport and Culture Department.

Mr. M. Magee had been assigned to the Comptroller and Auditor General's reports entitled "Setting  the  Scene.  States' Spending  Review" and "£35  million  cost reductions", and the annual report of the Health and Social Services Department. Mr. Magee was also allocated responsibility for the accounts of the Health and Social Services Department.

Mr. R. Bignell had been allocated responsibility for the annual reports of the Law Officers' and Home Affairs Departments, as well as the accounts of the Home Affairs,  Economic  Development  and  Transport and  Technical  Services Departments.

Mr. A. Grimes had been assigned to the Comptroller and Auditor General's report entitled "Pension Schemes for States' Employees" along with the annual reports of the Education, Sport and Culture, Social Security, and Housing Departments. Mr. Grimes was also allocated responsibility for the accounts of those Departments.

Advocate A. Ohlsson had been assigned to the Comptroller and Auditor General's report entitled "Pension Schemes for States' Employees", along with the accounts of the Treasury and Resources and Social Security Departments.

Harbours A4. The Committee, with reference to its Minute No. A5 of 14th April 2008, Department lease considered a report on Ministerial Decision MD-PH-2008-0020: 26th March 2008, to St. Helier regarding the surrender and renewal of the lease to the St. Helier Yacht Club of its Yacht Club of clubhouse at South Pier, St. Helier .

premises at South

Pier, St. Helier : The  Committee  recalled  that  the  Chairman  had  called-in  for  review  the review of recommendation of the Property Holdings Department that the decision of the recommend- Minister for Economic Development regarding the surrender and renewal of the dation of lease to the St. Helier Yacht Club of its clubhouse at South Pier, St. Helier - the Property lease term being 26 years with a provision for the lessee to extend the term for a Holdings further 21 years, at a commencing annual rent of £40,000 - be accepted (R.25/2008 Department. refers).

1060/62/1.

(149) The Chairman reminded the Committee that the report had highlighted serious

issues regarding Property Holdings. The Committee was concerned as to why this property had not fallen under the remit of Property Holdings. It was noted that the proposition entitled "States of Jersey Property Holdings: Establishment" (P.93/2005 refers), which had set out the remit of Property Holdings, had not initially included property owned by the Harbours Department. It was noted that negotiations had been ongoing to try and change this, but that during the change to Ministerial Government these negotiations had broken down. It was noted that a proposition would have to be lodged if the property of the Harbours Department were to be relinquished to Property Holdings.

The Committee agreed the report that had been prepared by the Chairman and decided that it should be published.

Advocate A. Ohlsson and Connétable D.J. Murphy declared a conflict of interest

and took no part in the discussion or resolution of this item.

Procedures for A5. The Committee discussed the procedures for the re-appointment, and the re-appointment, powers of, the Comptroller and Auditor General, as detailed in Part 6 of the Public and powers of, Finances (Jersey) Law 2005.

the Comptroller

and Auditor The Chairman informed the Committee that, as stipulated by Part 6 of the Public General: Public Finances (Jersey) Law 2005, a proposition had been lodged on 17th June 2008 in Finances (Jersey) relation  to  the  re-appointment  of  Mr.  C.  Swinson,  O.B.E.  to  the  position  of Law 2005. Comptroller and Auditor General, for a further 5 years from 1st October 2008 512/1(19) (P.101/2008 refers). The Committee thanked Mr. Swinson for the work he had

carried out thus far, and noted with gratitude that he was proposed to continue in the role of Comptroller and Auditor General.

The Committee then discussed the powers of the Comptroller and Auditor General. It  was  noted  that  following  the  completion  of  the  Comptroller  and  Auditor General's spending review, possible revisions to the law would be considered, with the Law Draftsman's assistance if the Committee was in agreement.

The Committee was informed that the Public Finances (Jersey) Law 2005 had constrained the Comptroller and Auditor General, as regards companies owned by the States. It was noted that for these companies, the Comptroller and Auditor General might only investigate their corporate governance, and was not be able to look at any transactions made. This was noted as being in contrast to States' Departments, where this restriction would not apply. Concerns were raised as to how the proposition about the Jersey Enterprise Board could be investigated by the Comptroller and Auditor General in future due to there being a crossover of work carried out by States Departments and within companies owned by the States. The Committee noted that the Comptroller and Auditor General would seek to amend the law so that the powers in relation to States Departments could be extended to States owned companies.

Comptroller and A6. 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. following  the  recent  circumstances  that  had  arisen  in  respect  of  the  proposed 512/1(16) development  on  the  Island's  Waterfront,  under  the  aegis  of  the  Waterfront

Enterprise  Board  (WEB),  the  Comptroller  and  Auditor  General  informed  the Committee that he had decided to look into the matter, and had issued a press release on the morning of 16th June 2008 which had declared this intention. The Committee was apprised of the terms of reference for the proposed review which read as follows -

"To investigate the circumstances surrounding the decisions made by the board of WEB concerning the proposed development to establish:

1. Whether proper rules of corporate governance have been established and applied by WEB;
2. In particular, whether proper arrangements were made by the board of WEB to identify potential conflicts of interest and ensure that board decisions were not affected by them;
3. Whether, in the circumstances, the decisions which were made by the board of WEB in respect of the development were appropriately based on all the commercial evidence and advice which the board might reasonably have been expected to obtain and take into account; and,
4. Any other issues relevant to the matters set out above."

It was noted that the review would be conducted in conjunction with the relevant representatives  and  agencies,  and  that  the  findings  would  be  published  upon

completion.

The Comptroller and Auditor General reminded the Committee that the review would examine the advice taken by WEB, but would not discuss the wisdom of any decisions taken, and that the final decision taken by WEB was a political matter. It was also noted that the commissioning of this review had been entirely of the Comptroller and Auditor General's volition. It was also recognised that WEB had agreed to co-operate fully with any requests for information. It was hoped that the report would be finalised by 1st July 2008.

The Committee agreed that it would look forward to the findings of the report, and the Comptroller and Auditor General undertook to keep the Committee informed of its progress.

Dates for A7. The Committee agreed the  undermentioned schedule of dates for Public meetings and Accounts  Committee  meetings  in  2009,  which  would  be  held  on  Mondays hearings in 2009. commencing at 12.30 p.m. in the Blampied Room, States Building, Royal Square, 512/1(20) St. Helier unless otherwise notified -

19th January 20th July

16th February 17th August (if necessary) 16th March 19th October

20th April 23rd November

18th May 14th December

15th June

The Committee also agreed that the afternoons of 21st and 22nd July 2009 would be  scheduled  for  public  hearings  regarding  the  annual  accounts,  and  that  21st September 2009 should be scheduled as an away day to consider the 2009/2010 programme.

Connétable D.J. Murphy requested a copy of the schedule be sent to Mrs. S.R. de Gruchy,  Secretary  to  the  Comité  de   Connétable s.  The  Committee  Clerk  was directed to take necessary action.

Declarations of A8. Advocate  A.  Ohlsson  raised  the  issue  of  declarations  of  interest  during Interest. meetings of the Committee. The Committee discussed whether or not a register 512/1(21) should be collated with all the relevant declarations of the Committee's members

listed. Whilst it was agreed that this might be useful, and would be consistent with States procedure, the Comptroller and Auditor General noted that there had been few past events where issues regarding conflicts of interest had arisen. Subsequent to the discussion it was agreed that members should declare their interests as they arose during meetings of the Committee as it was felt that this would ensure that this would allow interests to be definitively declared without any ambiguity.

Draft Report on A9. The Committee noted that a draft copy of the report entitled Report on the the Responses to Responses to Recommendations of the Public Accounts Committee as at December Recommen- 2007' had been circulated to all members. The Committee was invited to make any dations of the comments that it wished by 23rd June 2008, after which the report would be Public Accounts published.

Committee as at

December 2007

512/1 (15)

States of Jersey A10. The Committee noted that immediately following this meeting, a private 2007 Financial hearing would be held at which Mrs. Rebecca Brewer and Mr. Ciaran McLaughlin, Report and representing   Price waterhouseCoopers  (PwC),  States  Auditors,  and  Mr.  Paul Accounts: Private Redfern, the Chief Internal Auditor of the States, would be interviewed regarding hearing on 16th the States of Jersey Accounts for 2007.

June 2008 - representatives of PwC, States Auditors, and Chief Internal Auditor. 512/1(13)