Chairmen's Committee - Approved Committee Minutes - 10 July 2012

Present

Deputy T.A. Vallois, President Deputy S.G. Luce , Vice-President Senator S.C. Ferguson

Deputy J.M. Maçon

Deputy J.H. Young

Deputy K.L. Moore

Apologies

Absent

In attendance

 Mrs. K. Tremellen-Frost, Scrutiny Manager

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Agenda matter

Action

03.07.12 Item 4

1443(1)

1. Public Accounts Committee [PAC] and Comptroller and Auditor General: retention of independent status

The  Committee  considered  the  current  situation  following  the resignation  of  the  Comptroller  and  Auditor  General's  on  29th  June 2012.

Article 41(5) of the Public Finances (Jersey) Law 2005 permitted the Chief Minister and the Chairman, Public Accounts Committee [PAC] to appoint a person to carry out the duties of the Comptroller and Auditor General whilst the office was vacant.

The Chief Minister and Chairman, PAC had agreed that an approach would be made to the National Audit Office [NAO], London to identify whether there was any possibility of a contract of employment with an individual from the NAO on an interim six-month basis. This would create time during which a proper appointment process in accordance with Article 41 (3) of the Public Finances (Jersey) Law 2005 could be undertaken to fill the post on a fulltime basis. This Article made it incumbent  on  the  Chief  Minister  and  Chairman,  PAC  to  take  into account  the  views  and  recommendations  of  any  body  or  person appointed  by  the  States  to  advise  on  the  appointment  of  senior employees of the States, namely the Appointments Commission.

The Committee considered informal suggestions which had been made to some individual Members that there was now an opportunity to re- examine matters pertaining to the structure of PAC. This included the suggestion  of  maybe  the  possibility  of  more  integration  with  the Treasury  Department  and  the  requirement  for  a  Chief  Officer specifically for the PAC.

The  Committee  considered  the  possible  ramifications  of  these suggestions and also considered the foundations upon which the office of the C&AG and the role of PAC had been established. It was noted that both the offices of the C&AG and the PAC had been established in

KTF

accordance  with  a  study  and  subsequent  report  undertaken  by  the Institute  for  Public  Finance.  That  report  recommended  that  it  was fundamental to introduce a Nation States audit structure in order to ensure best practice. The implications of this were that it would need to establish the role of an official and independent States Auditor who would have a comprehensive audit remit and would report to a PAC equally independent from the Executive.

The Committee noted that this independent status of both roles was an important area in the principles of the Lima Declaration of Guidelines on Auditing Precepts which had been accepted by the Congress of the International Organisation of Supreme Audit Institutions (INTOSAI). It was on the basis of these good practice principles that Jersey had established offices of the C&AG and a PAC which were independent from the Executive.

Given  the  above,  the  Committee  agreed  that  it  was  imperative  to maintain good practice and that it would consequently be inappropriate for the role of either the C&AG or the PAC to be amended in any way which may remove this important independent status. This would not prelude the Committee, however, from considering any proposals which may  be  forthcoming  from  the  Minister  for  Treasury  and  Resources which would not impact on this independent status.

With regard to the suggestion of a Chief Officer for the PAC function, the Committee, having considered what additional value this might bring to  the  work  and  function  of  the  PAC,  concluded  that  it  was  not necessary. There would also be a matter of the accountability structure as it would be wholly inappropriate for an officer working to support the PAC function to be accountable to the Chief Executive of the States given the importance of remaining independent from the Executive.

512/1(40)

2.  Public Accounts Committee: general matters regarding work programme and status

The  Committee  noted  that  the  appointment  of  the  independent members had been deferred until September as the PAC was currently unable to undertake any work during the summer recess as i) it was now unable to follow up the C&AG report on Lime Grove given the recent challenges to the report's credibility and ii) the lack of availability of Accounting Officers and some PAC Members at mutually convenient times during the summer recess meant an inability to start a review of the Report and Accounts.

512/1(41)

3.  Public Accounts Committee: PAC Code of Practice

The  Committee  noted  that  although  the  PAC  Code  of  Practice overlapped by way of processes and procedures with the Scrutiny Code of Practice, that there were areas specific to the Pac which separated it in some ways from the main Scrutiny Code of Practice. Currently this was included in Section 13 of the Code for practice.

In  view  of  the fact that  the responsibility  for  updating  the  Code of Practice  was  a  responsibility  of  the  Committee,  it  gave  some consideration as to whether it might be preferable to separate the two, thereby giving more clarity and separate status to the PAC section without separating it totally from its related scrutiny function.