consultation document - audit wales• a draft code of audit practice of the auditor general for...

Consultation DocumentPart 1: Draft Code of Audit Practice of the Auditor General for Wales

Part 2: Draft Statement of Practice of the Auditor General for Wales for local government improvement audit, assessment and special inspection functions

November 2013

Overview

This consultation invites views and comments on two separate but related documents:

• adraftCodeofAuditPracticeoftheAuditorGeneralforWales;and

• adraftStatementofPracticewhichdescribeshowtheAuditorGeneralintendsto exercise local government improvement audit, assessment and inspection functions.

Followingconsultation,afinalversionoftheCodewillbeissuedandpublishedbytheAuditorGeneral.AfinalversionoftheStatementwillbepreparedandprovidedto the Welsh Ministers for their approval, before being published.

How to respond

Pleaserespondby31January2014.

Response forms can be sent to the following address:

Code and statement consultationWalesAuditOffice24CathedralRoadCardiff CF119LJ

[email protected]

Ifyourequirethispublicationinanalternativeformatand/orlanguagepleasecontactususingthedetailsprovidedaboveorbytelephoneon02920320500.

Publication of responses – confidentiality and data protectionInformationprovidedinresponsetothisconsultationmaybepublishedordisclosedinaccordancewiththeaccesstoinformationregimes(chieflytheFreedomofInformation Act 2000, but also the Data Protection Act 1998 and the Environmental InformationRegulations2004).

Ifyouwantanyinformationyouprovidetobetreatedasconfidential,itwouldbehelpfulifyoucouldexplaintouswhyyouregardtheinformationyouhaveprovidedasconfidential.

Ifwereceivearequestfordisclosureoftheinformationwewilltakefullaccountofyourexplanation,butwecannotgiveanyassurancethatconfidentialitycanbemaintainedinallcircumstances.AnautomaticconfidentialitydisclaimergeneratedbyyourITsystemwillnot,ofitself,beregardedasbindingontheAuditorGeneral.

Personal data will be processed in accordance with the Data Protection Act. Where suchdatafallswithinthescopeofarequestforinformationfromanotherperson,the provisions of the 1998 and 2000 Acts will need to be considered in the particular circumstances.Whilenosituationcanbeprejudged,thisislikelytomeanthatinformationconcerningseniorofficialsandpublicfiguresislikelytobedisclosedwhilethenamesandaddressesofordinarymembersofthepublicarelikelytobewithheld.

© Auditor General for Wales 2013

Inresponsetonewlegalrequirements,andtakingaccountofthestrategicprioritiesforourapproachtopublicauditforthenextthreeyears,Iproposetoenhanceandextendtheunderlyingsetofprinciplesforthosecarryingoutworkonmybehalf.

Myproposalsarelaidoutintwodocuments,whichIhavebroughttogetherforthepurposesofthisconsultation:

• adraftCodeofAuditPracticethatprescribesthewayinwhichmyauditandcertainotherfunctionsaretobecarriedout;and

• adraftStatementofPracticethatdescribesthewayinwhichmylocalgovernmentimprovementauditand assessment functions must be exercised.

BothdocumentsaredesignedtocomplementInternationalStandardsonAuditingandbothembodywhatappears to me to be best professional practice.

Ifirmlybelievethattherevisedsetofprinciplesproposedinthisconsultationwillallowustomaximisethecontributionauditorscanmaketodemocraticaccountability;helpingthepeopleofWalesknowwhetherpublicmoneyisbeingmanagedwisely,andpublicbodiesinWalesunderstandhowtoimproveoutcomes.

Ilookforwardtoreceivingyourviewsonmyproposals.

Huw Vaughan Thomas

Auditor General for Wales

Foreword by the Auditor General

Part 1: Code of Audit Practice

ThisCodeprescribeshowauditorsmustcarryouttheAuditorGeneralforWales’auditand 6 certain other functions

Thepurposeofpublicsectorauditistoreportonthestewardshipofpublicmoneyandinthe 7 process provide insight and promote improvement

FiveprinciplesunderpintheauditworkoftheAuditorGeneral–beingpublicfocused, 8 independent, proportionate, accountable and sustainable

TheGeneralCode–thisprescribesthewayauditorsmustcarryouttheirfunctions 9

TheSpecificCode–thisfurtherprescribesthewayauditorsmustcarryoutparticularfunctions, 13 aspartofaco-ordinatedapproachtoauditwork

Schedule1:Certainotherfunctions 17

Schedule 2: The audit of small bodies 21

Annex: The application of this Code and its scope in terms of functions 22

Part 2: Statement of Practice

ThisStatementdescribeshowauditorsmustexercisetheAuditorGeneralforWales’local 25 government improvement audit, assessment and special inspection functions

Auditorsmustcarryoutlocalgovernmentimprovementaudit,assessmentandspecialinspection 26 workinaccordancewiththeprinciplesandgeneralapproachprescribedintheAuditorGeneral’s Code of Audit Practice

Contents

5Consultation document

Part 1: Code of Audit Practice

Consultation document6

This Code prescribes how auditors must carry out the Auditor General for Wales’ audit and certain other functions

1 TheAuditorGeneralisthestatutoryexternalauditor of most of the Welsh public sector. The PublicAudit(Wales)Acts2004and2013,theGovernmentofWalesActs1998and2006,alongside a range of other legislation, provide the statutorybasisfortheAuditorGeneraltocarryouthisorherwork.

2 TheAuditorGeneralisalsotheAccountingOfficerfortheWalesAuditOffice,whichemploysstaffand procures other resources that enable the AuditorGeneraltocarryouttheAuditorGeneral’sfunctions.

3 ThePublicAudit(Wales)Act2013providesthatthe Auditor General must issue a code of audit practice,whichprescribesthewayinwhichtheAuditorGeneral’sauditfunctions(alongsidecertainotherfunctions)aretobecarriedout,andembodies what appears to the Auditor General to be best professional practice. This Code of AuditPractice(thisCode)fulfilsthatpurposeandreplaces the Code that was in effect from 1 April 2010underthePublicAudit(Wales)Act2004.

4 Inparticular,thisCodeisdesignedtocomplementInternational Standards on Auditing and recognised standards and guidance that are regarded as best professional practice, such as thatissuedbytheFinancialReportingCouncilandbyprofessionalbodies.

5 ThefunctionstowhichthisCoderelatesmaybecarriedoutbytheAuditorGeneralormaybedelegated to others1.Consequently,inthisCodetheterms‘auditor’and‘auditors’applycollectivelyto:

a theAuditorGeneral;

b employeesoftheWalesAuditOffice;and

c anypersonwhoprovidesauditservicestothe WalesAuditOffice.

6 Schedule1ofthisCodeprescribesthewayin which certain other functions of the Auditor General are to be carried out. Some of these functionsareincludedasspecifiedbythe2013Act,andsomeareincludedonavoluntarybasis.

7 TheAnnextothisCodesummarisesinaflowcharthow this Code must be applied to audit and to certain other functions of the Auditor General, and outlines the functions to which the provisions of thisCodeapplyonastatutorybasis.

8 TheAuditorGeneralwillissuesupplementaryguidance on the application of this Code, including arrangements for how compliance with this Code will be assessed.

9 UndertheLocalGovernment(Wales)Measure2009, the Auditor General must prepare a statementofpracticethatdescribesthewayinwhich he or she intends to exercise the Auditor General’slocalgovernmentimprovementassessment, improvement information and planning audit and associated reporting and co-ordinationfunctions.TheAuditorGeneralhasprepared such a statement (see Part 2 of this consultation).TheStatementdoesnotformpartofthisCodebuthasbeenpreparedinsuchawaythat it is aligned with it.

1TheAuditorGeneralmustprepareaschemetowhollyorpartlydelegateanyoftheAuditorGeneral’sfunctionstoanemployeeoftheWalesAuditOfficeoraperson whoprovidesservicestotheWalesAuditOffice


The purpose of public sector audit is to report on the stewardship of public money and in the process provide insight and promote improvement

10 Inademocracy,governmentsareaccountabletothe public and their elected representatives. To facilitatethisaccountability,thepublicandtheirrepresentativesmustbeadequatelyinformedabout the activities of the government and its use ofpublicfunds;theyneedinformationwhichistimely,impartial,accurate,comprehensiveandclear.

11 Independent audit of the activities of government andoftheuseofpublicfundsbythosechargedwith stewardship of those funds is an essential componentofdemocraticaccountability.Externalauditorsindependentlyexaminewhetherpublicmoneyisbeingmanagedwiselyandisproperlyaccounted for. Public sector audit involves more than an opinion on the accounts. It also covers issuessuchasregularity(whetherpublicmoneyisbeingusedforapprovedpurposes),propriety(howpublicbusinessisbeingconducted)andvalueformoney.Auditorscarryoutthisworkonbehalf of the public and in the public interest. Itisnotpartofauditors’functionstoquestionthemeritsofgovernmentpolicy,butauditorsmayexaminethearrangementsbywhichpolicydecisions are reached and consider the effects of theimplementationofpolicy.

12 Auditaddsvaluetosocietyby:

a providing assurance on the governance and stewardshipofpublicmoneyandassets;

b offering insight on the extent to which resourcesareusedwiselyinmeetingpeople’sneeds;and

c identifyingandpromotingwaysbywhichtheprovisionofpublicservicesmaybeimproved.

13 However, external audit cannot act as a substitute forgovernments’andotherpublicbodies’ownresponsibilities, and does not replace the need for public bodies to obtain legal or other professional advice and to put in place effective internal control arrangements, including arrangements for internal audit2. It is for public bodies to ensure that their business is conducted in accordance with the law andproperstandards,andthatpublicmoneyissafeguarded,properlyaccountedforandusedeconomically,efficientlyandeffectively3.

14 TheAuditorGeneralisresponsiblefortheannualexternalauditofthemajorityofpublicmoneyspent in Wales, including those funds that are votedonannuallybytheNationalAssembly.ElementsofthisfundingarepassedbytheWelshGovernment to the NHS in Wales and to local government.

15 EachyeartheAuditorGeneral,withassistancefromtheWalesAuditOffice,deliversanextensivebut proportionate programme of external auditwork,inaccordancewiththeAuditorGeneral’sstatutorypowersandduties.Theoverall programme includes audits of accounts, valueformoneyexaminationsandstudies,local government improvement audits and assessments,certificationofgrantclaimsandsubsidies, and facilitation of the National Fraud Initiative.

16 GoodpracticeisidentifiedfromacrossthefullbreadthofauditworkandisdisseminatedthroughtheGoodPracticeExchange(aweb-basedresource,freelyavailabletoanyone)andothermedia including shared learning seminars.

2Theinternalauditfunctionofapublicbodyshouldcarryoutassuranceandconsultingactivitiesdesignedtoevaluateandimprovetheeffectivenessofthatbody’s governance,riskmanagementandinternalcontrolprocesses.

3 For further information please see the Statement of the responsibilities of the Auditor General for Wales and of the bodies that he or she audits on our website.


Five principles underpin the audit work of the Auditor General – being public focused, independent, proportionate, accountable and sustainable

17 Alongsidespecificlegalandprofessionalrequirements,fivewidelyrecognisedprinciplesunderpintheauditworkoftheAuditorGeneral.Auditorsmustcarryouttheirworkconsistentlyinaccordance with these principles.

Public focus

18 External audit is carried out on behalf of the public and is done in the public interest. The scope of public sector audit is wider than in the private sector and is essential to the process of holding public bodies to account. The public has alegitimatestakeinauditworkandshouldbeengaged with its processes. Outputs from audit workmustbeaccessible,timely,evidence-basedandrelevanttostakeholders.

Independent

19 Audit must be, and be seen to be, independent. Itmustbecarriedoutwithintegrityinawaythatis objective, impartial and in accordance with relevant ethical standards and considerations. Auditorsmustnotbeconstrainedbyanyparticularinterestinundertakingtheirwork,andshouldreport in public without fear or favour.

Proportionate

20 Service providers need to be given enough space to deliver services to a high standard, while being subjecttosufficientlevelsofscrutiny.Strikingthisbalanceisanimportantpartoftheauditor’sjudgement in determining the nature, scope, scale anddurationofauditwork.Auditorsarerequiredtoundertakecertaintasksandmustobtaintheinformationandexplanationsnecessarytoprovidesufficientevidencetomeettheirresponsibilities,buttheyarenotexpectedtoreviewallaspectsofauditedbodies’arrangements,systemsorrecords.

Accountable

21 Publicsectorauditorsarepubliclyfundedandare accountable for the stewardship of the resourcesprovidedtothem.Theymustcarryouttheirworkeconomically,efficientlyandeffectively.Auditorsmustbetransparentintheiractivities,inaccordancewiththelegalframeworkthattheyworkin,sothatallpartiesunderstandthe particular purpose for which audit is being undertaken.

Sustainable

22 Sustainable development is about meeting the needs of the present without compromising the abilityoffuturegenerationstomeettheirownneeds.Auditworkmustbeundertakenwithregard to sustainable development as a central organising principle for strategic decisions. Throughtheirwork,auditorsmusthavedueregardtotheneedtopromotesocialjustice,equality,and the enhancement of the natural and cultural environment.

Question 1Do you agree with the five principles which we propose should underpin our audit work?


The General Code – this prescribes the way auditors must carry out their functions

23 InaccordancewiththefiveprincipleslaidoutinthisCode,thefollowingwillapply.

24 Whencarryingouttheirwork,auditorsmustcomplywithauditingandethicalstandardscurrentlyinforceandasmaybeamendedfromtime to time4, and that appear to the Auditor General to be relevant. Auditors must also have regard to related guidance and advice where this appears to the Auditor General to be relevant.

25 AuditorsmustundertaketheirworkinaccordancewithanyfurtherguidanceissuedbytheAuditorGeneralandwithregardtotheAuditorGeneral’sstrategic objectives.

26 TheAuditorGeneralisrequiredtoreporttotheNationalCrimeAgency5anyinstanceofdealingsintheproceedsofcrime(moneylaundering)thatauditors encounter during the course of their work.AuditorsmustthereforethroughoutthecourseoftheirworkmaintainanopenmindastothepossibilityofpersonsdealingintheproceedsofcrimeandreportanyknowledgeorsuspiciontotheWalesAuditOfficeMoneyLaunderingReportingOfficer.Auditorsmustalsoensurethat,

duringthecourseoftheirwork,theycomplywithotherspecificreportingrequirements6.

Planning

27 Auditorsmustplananddocumenttheplanningoftheirwork.Theymust:

a have a sound understanding of the relevant underpinning audit legislation and professional auditingstandards;

b have an overall understanding of the laws, regulations, policies, guidance and models of governancethatapplytothebodiestheyaudit;

c carryoutinitialscopingwork,includingobtainingtheviewsofrelevantstakeholders,toinformthedesignofauditwork;

d haveregardtoanycorrespondencereceivedfrom the public or other interested parties, including disclosures received from individuals employedbyauditedbodies7, about matters relevanttotheAuditorGeneral’sfunctions;

e conductananalysisoftheissuesandrisksthatare relevant to the audit and, with the exception ofopinionauditwork(whichisgovernedbyauditingandethicalstandards),organisetheirworkaroundarelevantandstructuredsetofquestions;

f designafieldworkmethodologytogatherinformationinaconsistentwayatalocal,regional and national level as appropriate, but notlimitedbyexpectationsofuniformity;

g haveregardtothefactthatpublicservicesmaybe delivered through a range of collaborative arrangements, including partnerships and contracts, and consider how to follow public moneyacrosssucharrangements;

h haveregardtothewidersystemsofaudit,inspection and regulation of public bodies, and:

i haveregardtoanyprotocolsthattheAuditorGeneralorWalesAuditOfficeagrees with other external review bodies andanyassociatedguidance8;and

4IncludingInternationalStandardsonAuditingandotherinternationallyrecognisedstandards

5UndertheMoneyLaunderingRegulations2007

6SuchasthoserequiredundertheCompaniesAct2006

7UnderthePublicInterestDisclosureAct1998,theAuditorGeneralisa‘prescribedperson’whocanreceivewhistle-blowingdisclosuresfromindividualsemployed byauditedbodiesinrespectoftheproperconductofpublicbusiness,valueformoneyandfraudandcorruptioninrelationtotheprovisionofpublicservices

8Forexample,Estyn,theCareandSocialServicesInspectorateWales,HealthcareInspectorateWalesandtheWalesAuditOfficehavesignedastrategic agreementoncollaborativeworking


ii where appropriate, establish effective co-ordinationarrangementswithotherexternal review bodies to share information, makebestuseofoverallresources,avoidduplication and to ensure that demands on auditedbodiesareminimised;

i have due regard to sustainable development as a central organising principle for strategic decisions, the need to eliminate discrimination, advanceequalityofopportunityandfostergood relations9, and to treating the Welsh and Englishlanguagesonanequalbasis10;

j discuss the audit plan with audited bodies at anearlystagewhereverpossible,includinganticipatedcostsandhowtheycancontributetothedeliveryofanefficientaudit,forexample,throughtimelyandeffectiveproductionofrequiredworkingpapersandbyrespondingfullyandpromptlytorequestsforinformation;and

k reviewtheplanthroughouttheauditandupdateasnecessary.

Fieldwork

28 Whilecarryingoutfieldwork,auditorsmust:

a carryouttheirworkprofessionallyinaccordance with relevant legislation, auditing standardsandwithguidanceissuedbytheAuditorGeneral;

b liaiseeffectivelywithanyrelevantinternalauditfunctions in line with international auditing standards;

c obtainsuchinformationasisnecessary,usingrelevant legal rights of access to provide answerstoanyrequiredquestionsandtomeetstatutoryandprofessionalresponsibilities;

d capture and consider the views, experiences and concerns of service users, providers and otherrelevantstakeholders,asappropriate;

e workefficiently,placingrelianceonworkpreviouslyundertakenbytheAuditorGeneral,alongsiderobustself-evaluationactivity,theworkofinternalauditandthatofotherexternal review bodies, whenever possible and appropriate;

f reviewwhetherauditedbodieshaveproperlyconsideredanyrelatedmattersthathavebeenidentifiedpreviously,includingbyinternalaudit,the Auditor General and other external review bodies, and whether recommended actions havebeenimplemented;

g obtaininformationinawaythatfacilitatesbenchmarking,performancecomparisonofoutcomesandtheidentificationofgoodpractice,whereverpossible;

h ensure that all data received or obtained is held securelyandincompliancewithstatutoryandotherrequirementsrelatingtothecollectionandotherprocessingofinformation;

i communicateregularlywithauditedbodiesandensurethatemergingfindingsarediscussedattheappropriatelevelandinatimelyway,asnecessary;and

j document and share information with other auditorsonissuesarisingfromtheirworkthatcouldhaveabearingorsignificanceonotherauditworkbeingundertakenbytheAuditorGeneral, or inform future programmes of audit work.

9AslaidoutintheEqualityAct2010andtheStrategic Equality PlanoftheWalesAuditOffice

10 As laid out in the Welsh Language SchemeoftheWalesAuditOffice


29 The Auditor General has extensive legal rights of access to information and documents which are important for the proper exercise of the Auditor General’sfunctions.TheAuditorGeneralwilltakearigorousapproachtowardsenforcingsuchrights, since the obstruction of access rights fetters auditors’abilitytoproperlycarryouttheirworkanddrivesupthecostsofthatwork.

30 Toavoidanypotentialmisunderstandingwhenitappears that access rights are being obstructed byanyperson,auditorswillcommunicatetherelevantrightstothepersoninquestion.Ifthepersonstillseekstoobstructaccessfollowingthis communication, the Auditor General will pursue legal action to gain access to the relevant documentsandrecoveranyassociatedcosts.

Reporting

31 Afterconcludingfieldwork,auditorsmust:

a drawevidence-basedconclusionsabouttheoutcomesoffieldworkandansweranyquestionsthattheworksetouttoaddress;

b consider whether their conclusions are consistentwiththosearisingfromtheworkofinternal audit or other external review bodies, whereappropriate;

c determinethekeymessagesandthestructureoftheoutputsthroughwhichtheywillbereported;

d offer audited bodies and relevant third parties theopportunitytocommentonthefactualaccuracyofthefindings,asappropriate;

e makerecommendationsforimprovement,whererelevant,which,intheauditor’sjudgement, are:

i useful,specificandpracticableandfocusedontheinterestsofthepublic;

iiconsistentwithsustainabledevelopment;and that

iiitakeaccountoftheanticipatedcostsofimplementation and report where these are likelytobesignificant;

f produce outputs that:

i complywithstatutoryandprofessionalreportingrequirements;

ii areaccessible,timely,clearandconcise;

iii are written in plain language, avoiding jargon and technical terms, wherever possible;

iv onlyidentifyindividuals,whetherbyname,job title or other information, to the extent thatitisnecessarytoprovideaproperreport;

v are open about the scope and limits of the work;

vi wherepossibleandappropriate,identifyandquantifypotentialsavingsandefficiencies,alongsidecommonrisksfacedbypublicbodiesinWalesandelsewhere;and

vii includeormakereferencetoexamplesofgoodpractice,asappropriate;


g encourage and challenge service providers to improve,includingthroughtakingownershipofauditfindingsandrecommendationsandgivingconsiderationtoanyexamplesofgoodpractice;

h emphasisethatanyweaknessesorrisksidentifiedareonlythosewhichhavecometotheirattentionduringtheirworkandmaynotbeallthatexist;and

i ensurethatauditknowledgeandlearningcan be made available to a wide range of stakeholdersandbeneficiaries,tomaximisethepotentialimpactandvalueofthework.

Following up

32 Afterreportingontheirfindings,auditorsmust:

a whereappropriate,requestaresponsefromrelevantpartiestotheirfindingsandrecommendations,andstatewhethertheyaresatisfiedthatfindingsandrecommendationshavebeenproperlyconsidered11;

b monitoranyactionstakeninresponsetotheirrecommendations;

c comment,asnecessaryandthroughappropriate channels, on progress made on implementing recommendations, and on recommendationsthathavenotbeenproperlyconsideredoractedupon;

d haveregardtoanyfurthercorrespondencereceived from the public or other interested parties,includinganyfurtherdisclosuresreceivedfromindividualsemployedbyauditedbodies, about matters relevant to the audit findingsandrecommendations;

e seektoidentifyadditionalopportunitiesforsharingauditknowledgeandlearning,includingviaorganisations,providersandnetworkswhoareactiveinthefieldofknowledgetransfer,asappropriate;

f whererelevantanduseful,makecasestudyexamples of good practice and innovation available for addition to the content of the Good PracticeExchange;

g where appropriate, relevant and useful, proactivelyoffercommentaryandinsightfromauditworktopublicsectorpolicy-makersandworkinggroups;

h initiatefurtherauditwork,whereitisconsiderednecessarytomeetstatutoryresponsibilities;

i respondpositivelytotheresultsofqualitymonitoring,reviewsoftheirworkbytheAuditorGeneral and other review bodies, and external stakeholderfeedback,includingthatreceivedfromauditedbodies;and

j reflectontheirworkandusethelearningtoinformfutureprogrammesofauditworkand to further improve audit processes and methodologies.

11Responsibilityforimplementingrecommendations,andthemechanismsthroughwhichthisisdone,liessolelywiththeauditedbody

Question 2Do you agree with the content of the proposed General Code which prescribes the way auditors must plan, carry out, report and follow up on their work?


33 In addition to the General Code and in accordance with the principles of being public focused, independent, proportionate, accountable and sustainable,thefollowingwillapplyinfullunlessspecifiedbytheAuditorGeneral(seeparagraph41).

Audit of accounts and value for money examinations and studies

34 TheAuditorGeneralissuesreportsontheaccounts of public service bodies that he or she audits. Audit reports include an opinion on:

a whetherthefinancialstatementsproperlypresent,presentfairlyorgiveatrueandfairviewof,asappropriate,thefinancialaffairsofthebody;

b whetherthefinancialstatementshavebeenpreparedproperlyinaccordancewithrelevant legislation, directions and applicable accountingstandards;and

c theregularityofthetransactions,atbodieswherethisisrequired.

35 Auditorswillprovidereasonableassurancethattherelatedfinancialstatements:

a are free from material misstatement, whether causedbyfraudorotherirregularityorerror;

b complywithstatutoryandotherapplicablerequirements,includingtheregularityoftransactionsatbodieswherethisisrequired;and

c satisfyallrelevantaccountingpresentationanddisclosurerequirements.

36 Auditorswill,whererequired,reviewandreportonthe Whole of Government Accounts return.

37 Auditorswillprovideassuranceontheeffectiveness of governance arrangements and, where appropriate, on other issues of public interest. To this end, auditors will:

a reviewgovernancestatementstoconfirmthatthese are not inconsistent with the audited financialstatementsandotherinformationofwhichtheyareaware;and

b report, as appropriate, on matters that might not be material to the audit opinion but whichareofpublicinterest,suchasfinancialstanding, standards of conduct and the efficiencyandeffectivenessof:

i governancearrangementsandsystemsofinternalcontrol;

ii financialsystems;and

iii arrangements for the prevention and detectionoffraudandirregularities,briberyand corruption.

38 InworkingtosatisfytheAuditorGeneralthatalocalgovernmentorNHSbodyhasmadeproperarrangementsforsecuringeconomy,efficiencyand effectiveness in its use of resources, auditors willapplycriteriaspecifiedbytheAuditorGeneral.For local government bodies, auditors will also place reliance on the following sources of assurance:

a theresultsoftheauditworkundertakenonthefinancialstatements,theeffectivenessofgovernance arrangements and on other issues ofpublicinterest;

The Specific Code – this further prescribes the way auditors must carry out particular functions, as part of a co-ordinated approach to audit work


b theresultsofotherworkcarriedoutbytheAuditorGeneral,includingvalueformoneyexaminationsandstudies,certificationofclaims and returns, data matching exercises andworkcarriedoutundertheLocalGovernment(Wales)Measure2009;

c theresultsoftheworkofinternalauditandofother external review bodies where appropriate andrelevanttotheauditor’sresponsibilities;and

d anyotherworkthataddressesmattersnotcoveredbytheabove,andwhichtheauditorconsidersnecessarytodischargetheirresponsibilities.

39 Plansandresultsofauditworkundertakenonthefinancialstatementswillbereportedviaarangeofappropriateoutputs.Thefollowingoutputsmaybeissuedbytheauditoratkeypointsintheauditprocess:

a anauditplanningdocument;

b oral and written reports or memoranda to appropriate individuals on the results of, or mattersarisingfrom,specificaspectsoftheauditor’swork;

c a report to those charged with governance summarisingthefindingsandconclusionsoftheauditor;

d anauditreportincludingtheauditor’sopinion(s)onthefinancialstatements;

e certificationthattheauditoftheaccountshas been completed in accordance with statutoryrequirements;and

f arelatedsubstantivereportiftheauditor’sopinionisqualified12 or if the Auditor General wishestoreportonanymatter.

40 Theauditormayalsoissuefurtheroutputsinaccordance with relevant legislation and guidance. Thoughnotexhaustive,thismayincludereportsmade in the public interest, statements of reasons followingobjectionsraisedbylocalauthorityelectors, responses to correspondence, and feedbackonanexceptionbasiswhereanyoftheinformationreviewedindicatessignificantfailurestoperformtheGeneralEqualityDutyonthepartofaudited bodies.

41 TherewillbecircumstancesinwhichaspectsoftheSpecificCodemaybeinappropriatetotheaudit of accounts of certain bodies, for example, duetotherelativelysmallamountsofpublicmoneycontrolledbythebodiesinquestion.Incarryingouttheauditofsuchbodies,auditorsmustcarryouttheirworkinaccordancewithguidanceissuedbytheAuditorGeneral.Incarryingouttheauditofsmallbodieswitheitherannual income or annual expenditure below a financiallimitdeterminedbytheAuditorGeneralfromtimetotime,auditorsmustapplySchedule2ofthisCodeifdirectedtodosobytheAuditorGeneral.

42 TheAuditorGeneralhaspowerstoexaminetheeconomy,efficiencyandeffectiveness(togetherknownasvalueformoney)withwhichpublicservicebodies,individuallyorcollectively,usetheirresources,andtomakerecommendationsforimprovingvalueformoney.TheAuditorGeneralmayalsoundertakeothertypesofexaminationsand studies.

43 Inrelationtolocalgovernmentbodies,theAuditorGeneralhasdutiestoundertakestudieseachfinancialyeartoenabletheAuditorGeneraltomakerecommendationsforimproving:

12Asopposedtoanunqualifiedopinion,whichisexpressedwhentheauditorconcludesthatthefinancialstatementsgiveatrueandfairview,areproperlypresented orarepresentedfairly(asappropriate),inallmaterialrespectsandinaccordancewiththeapplicablefinancialreportingframework


a valueformoneyinthedischargeoffunctionsofWelsh improvement authorities13;

b valueformoneyintheprovisionofservicesbyotherlocalgovernmentbodies;and

c thefinancialorothermanagementoflocalgovernment bodies.

44 TheAuditorGeneralalsohasdutiestoundertakevalueformoneystudiesoftheimpactofstatutoryprovisionsandWelshMinisters’directionsandguidance on local government bodies. The Auditor Generalmayalsoundertakeotherstudiesrelatingtotheprovisionofservicesbylocalgovernmentbodies,andmayundertakebenefitadministrationstudiesfortheSecretaryofState.

45 Thesefunctionsmaybeexercised,incombinationifnecessary,acrossdifferenttypesofbodies,to examine public spending irrespective of who delivers the services. The results from value for moneyexaminationsandstudies(otherthanthoseundertakensolelyinrelationtolocalgovernmentbodies)maybepresentedtotheNationalAssemblyandconsideredbyitsPublicAccountsCommittee.

46 InrelationtotheAuditorGeneral’sexaminationandstudyfunctions,theAuditorGeneralwillconsider, among other things, the following in decidingwhatworktoundertake:

a levels of public interest and concern14;

b the scale of the issues and the circumstances andrisksinvolved;

c whethertheworkistimely;

d whetherthelessonslearnedarelikelytobetransferable;and

e thepotentialvalueoftheworkintermsofmonetarysavings,improvedservicesandimproved management or governance.

47 Foranyparticularexaminationorstudy,auditorswill use the approach prescribed in the General Codetodevelopafieldworkmethodologythatenables them to determine the extent to which valueformoneyhasbeenachievedormaybeimproved, or in the case of studies that do not concernvalueformoney,toundertakesuchanalysisasisfitforpurpose.Whereapplicable,this will extend to assessing the effectiveness of

governancearrangements,includinganyservicedeliverypartnershipsandcollaborativeworkingarrangements.

48 TheAuditorGeneralwillseekandtakeaccountofthe views of people who represent the interests of protected groups15 in deciding what examinations andstudiestoundertake.IndecidingthecoverageofanyexaminationsandstudiesthatarerelevanttotheGeneralEqualityDuty,andindevisingfieldworkforsuchprojects,auditorsmustseekthe views of people that represent the interests ofprotectedgroups,soastotakeaccountoftheneeds of those groups.

Certification of claims and returns

49 Ifrequiredtodosobyarelevantbody16, the AuditorGeneralmustmakearrangementsforcertifying:

a claims or returns for grants, subsidies or contractpaymentsreceivedfromgovernmentsandpublicauthorities;

b returnsfornon-domesticratingcontributions;and

13Countyandcountyboroughcouncils,NationalParkauthoritiesandfireandrescueauthoritiesinWalesarecollectivelydefinedas‘improvementauthorities’inthe LocalGovernment(Wales)Measure2009

14IncludinginparticulartheviewsoftheNationalAssembly’sPublicAccountsCommitteeandlocalgovernment,whererelevant

15AsdefinedbytheEqualityAct2010

16‘Relevantbodies’areassetoutinparagraph20ofSchedule8totheGovernmentofWalesAct2006


c anyotherreturnwhichlegislationrequirestheAuditorGeneraltomakearrangementsfor(acurrentexamplebeingthatforteachers’pensioncontributions).

50 Auditorsmustdesigncertificationworkwithintherequirementsofstatuteandtoprovideaproportionate degree of assurance that grant claimsandreturnsarefairlystatedandinaccordancewithspecifiedtermsandconditions.TheAuditorGeneralwillencouragegrant-payingbodiestoagreeappropriatecertificationarrangementsbeforetheymakecertificationacondition of a grant or return.

51 Dependingonthecircumstances,certificationmaynotbethemosteffectivemeansofprovidingassurance.Auditorsmustinformgrant-payingbodiesthatcertificationshouldonlyberequiredwherethereisaclearjustificationforit,ratherthan as a matter of course. The Auditor General willprovideadvicetogrant-payingbodiesseekingcertificationonthemosteffectivemeansofobtaining assurance.

52 Wheregrant-payingbodieshavedecidedtorequirecertification,auditorswillexercisediscretion in meeting their obligations and will makeajudgementoncertificationarrangementsinspecificcases,havingconsidered:

a the particular circumstances of a scheme and thesumsinvolved;

b the level of assurance sought and potential alternativesourcesofassuranceavailable;

c therobustnessofthecriteriatobeapplied;and

d thenatureorextentoftheworkrequired.

53 Inundertakingcertificationwork,auditorsmustfollowtherequirementsoftheCertificationInstruction agreed between the Auditor General andthegrant-payingbody.Whereverpracticable,auditorsmustintegratetheircertificationactivitieswiththeirauditofaccountsandvalueformoneyexaminationandstudywork.

54 AuditorsmustalsoconsiderwhetheranyoftheinformationreviewedwhenundertakingcertificationworkindicatessignificantfailurestoperformtheGeneralEqualityDutyonthepartofpublicservicebodies,andwillprovidefeedbackonthis on an exception basis.

Exercising audit functions of the Comptroller and Auditor General

55 TheSecretaryofStatemayprovideforauditfunctions of the UK Comptroller and Auditor General to be transferred to, or become a function also of, the Auditor General for Wales.

56 Whenexercisingsuchauditfunctions,auditorsmustcarryouttheirworkinaccordancewiththeprinciples of being public focused, independent, proportionate, accountable and sustainable. Auditors will use the approach prescribed in the GeneralCodeforplanning,carryingout,reportingandfollowingupontheirwork.

Question 3Do you agree with the content of the Specific Code which further prescribes the way auditors must carry out particular functions, as part of a co-ordinated approach to audit work?


Providing advice and assistance to the Public Accounts Committee and other committees of the National Assembly

57 TheNationalAssembly’sPublicAccountsCommittee(theCommittee)considersreportspreparedbytheAuditorGeneralontheaccountsof the Welsh Government and other public bodies, andontheeconomy,efficiencyandeffectivenesswithwhichresourcesareemployedinthedischargeofpublicfunctions.TheCommitteemaythen issue its own reports on matters raised in reportspreparedbytheAuditorGeneral,andlaythosereportsbeforetheNationalAssembly17.

58 TherecommendationssetoutinCommitteereportsmaybedirectedatanypartofthepublicsector. However, the remit of the Committee does not include holding local government bodies to account. The Welsh Government is requiredtorespondformallytotheCommittee’sreports,tosaywhetherornotitacceptstherecommendations and, if accepted, how the recommendations will be implemented. The Welsh Government’sresponsewillincluderesponsestoCommittee recommendations directed at itself, Welsh Government Sponsored Bodies and NHS bodies.

59 TheCommitteemayseektheAuditorGeneral’sadviceorassistanceontheadequacyoftheWelshGovernment’sresponsetoitsrecommendations. In providing such advice or assistance, auditors must ensure that the AuditorGeneral’sindependenceandintegritywill not be compromised, or be perceived to be compromised.

60 WhereCommitteereportsincluderecommendations for audited bodies, auditors will bring those recommendations to the attention of relevantofficersandnon-officers,forexample,in updates to local audit committees or their equivalent.

61 WheretheCommitteedecidesnottoissueitsownreportonmattersraisedinareportpreparedbytheAuditorGeneral,itmaystillinvitetheWelshGovernment to respond to the recommendations setoutintheAuditorGeneral’sreport.Inthesecircumstances,auditorswillindependentlyadvisetheCommitteeontheadequacyoftheWelshGovernment’sresponsetotheAuditorGeneral’srecommendations.

62 OthercommitteesoftheNationalAssemblymayalsoseektheAuditorGeneral’sadviceorassistanceontheadequacyoftheWelshGovernment’sresponsetotheAuditorGeneral’sor their own recommendations. Again, in providing such advice or assistance, auditors must ensure thattheAuditorGeneral’sindependenceandintegritywillnotbecompromised,orbeperceivedto be compromised.

Exercising supervisory functions of Welsh Ministers

63 TheWelshMinistersmay,withtheconsentoftheAuditor General and after consulting the Wales AuditOffice,provideforanyoftheirsupervisoryfunctions of public bodies to be exercised on their behalfby,ortransferredto,theAuditorGeneral.Supervisoryfunctionsarefunctionsofexamining,inspecting,reviewingorstudyingfinancialorothermanagementarrangementsorthewaysinwhichpublic bodies discharge their functions.

64 Whenexercisingsuchsupervisoryfunctions,auditorswillcarryouttheirworkinaccordancewith the principles of being public focused, independent, proportionate, accountable and sustainable. Auditors will use the approach prescribed in the General Code for planning, carryingout,reportingandfollowingupontheirwork.

Schedule 1: Certain other functions

17ForfurtherinformationpleaseseetheStanding Orders of the National Assembly for Wales


65 Statuteprovidesthat,ifdirectedtodosobytheWelsh Ministers, the Auditor General will prepare areportontheexerciseofanytransferredsupervisoryfunction,andwilllaythereportbeforetheNationalAssembly.Againsuchreportingwillbe done in accordance with the General Code.

Providing advice and assistance to registered social landlords

66 TheAuditorGeneralmay18,ifheorshethinksitappropriate, provide advice or assistance to a registered social landlord in Wales for the purpose oftheexercisebytheregisteredsociallandlordofits functions.

67 Inconsideringwhetheritisappropriatetoprovidesuch advice or assistance and, if applicable, in providing such advice or assistance, the Auditor General will have particular regard for the need to protect audit independence. The Auditor General willalsohaveregardtothedesirabilityofmakinggood use of public resources, including audit expertise.

Disclosing information obtained in the course of a study in respect of a registered social landlord to the Welsh Ministers

68 TheAuditorGeneralmay19 disclose to the Welsh Ministersinformationobtainedbyauditorsinthecourseofastudyinrespectofaregisteredsociallandlord. In order to help the Welsh Ministers beefficientandeffectiveregulators,auditorsmust consider the relevance of information that theyobtaininthecourseofstudiesinrespectofregisteredsociallandlordstotheWelshMinisters’regulatoryfunctions.

69 Whereauditorsidentifyrelevantinformation,theymustshareitwiththeWalesAuditOffice’sInformationOfficerforonwardtransmissiontotherelevantWelshGovernmentofficials,subjecttodata protection and human rights considerations. Auditorsmustkeeprecordsofsuchinformationsharing. Except where it would be prejudicial or likelytobeprejudicialtotheWelshMinisters’regulatoryfunctions,auditorsshouldalsoinformthe relevant registered social landlords of the informationtobeshared,checkingitsaccuracywiththeminsofarasisreasonablypractical.

Referring matters related to social security to the Secretary of State

70 TheAuditorGeneralmay20refertotheSecretaryofStateanymatterarisingfromalocalgovernmentauditorstudyifitappearsthatthemattermayberelevantforthepurposesofanyoftheSecretaryofState’ssocialsecurityfunctions.AuditorsundertakinglocalgovernmentworkmustconsidertherelevanceofinformationthattheyobtaininthecourseofthatworktotheSecretaryofState’ssocialsecurityfunctions.

71 Whereauditorsidentifyrelevantinformation,theymustshareitwiththeWalesAuditOffice’sInformationOfficerforonwardtransmissiontotherelevantUKGovernmentofficials,subjecttodata protection and human rights considerations. Auditorsmustkeeprecordsofsuchinformationsharing. Except where it would be prejudicial or likelytobeprejudicialtotheSecretaryofState’sfunctions, auditors should also inform the relevant local government bodies of the information to be shared,checkingitsaccuracywiththeminsofarasisreasonablypractical.

18Undersection145DoftheGovernmentofWalesAct1998

19Undersection145C(8)oftheGovernmentofWalesAct1998;thisprovisionreflectsthefactthattheWelshMinistersaretheregulatorsofregisteredsocial landlords

20Undersection51ofthePublicAudit(Wales)Act2004;thisprovisionhelpstheAuditorGeneral’sworktobeusedforthebenefitofsocialsecurityfunctions


Participating with ‘observer status’ on external working groups

72 TheAuditorGeneralisoftenaskedtoproviderepresentatives to sit on and add value to externalworkinggroupsbyprovidingauniqueand impartial perspective on how well public servicesarebeingdeliveredandhowtheycouldbe improved. Auditors representing the Auditor Generalonworkinggroupswillactonlyasobservers.Theywillnotbeamemberofthegroupitselfbutwillseektoassistindeliberationsasfarastheyareabletodosobydrawingattentiontorelatedauditfindings,recommendationsand examples of good practice. In particular, theywillnotbepartytothedeterminationorimplementationofpolicyarisingfromthegroup’sactivities.

73 AuditorsmustensurethattheirparticipationasobserversonworkinggroupsdoesnotfettertheAuditorGeneralinanywayintheconductoftheAuditorGeneral’svariousauditfunctions.

Directing the publication of local government performance information

74 TheAuditorGeneralmaygivedirectiontolocal government bodies to publish information whichwillfacilitatemakingvalueformoneyandperformance comparisons.

75 Ingivingsuchadirection,theAuditorGeneralwill:

a identifythetype(s)oflocalgovernmentbodytowhichthedirectionapplies;

b identifythefinancialyear(s)inrelationtowhichtheinformationistobepublished;

c specifyordescribetheactivitiestowhichtheinformation is to relate and the form in which it istobepublished;

d sendacopyofthedirectiontoeverylocalgovernmentbodyonwhichdutiestopublishperformance information are imposed, no later than31Decemberinthefinancialyearwhichprecedesthefinancialyearinrelationtowhichtheinformationistobepublished;and

e publish the direction in a manner appropriate for bringing it to the attention of members of the public and their representatives.

76 Beforegivingsuchadirection,theAuditorGeneral will consult relevant associations of localgovernmentbodiesandanyotherpersonsheorsheseesfit.TheAuditorGeneralwillalsohaveregardtotheneedtomakegooduseofpublic resources, including audit expertise, and theimportanceofpublicfocus,particularlywitha view to the engagement of the public in the management of public resources.

Data matching

77 TheAuditorGeneralmayconductdatamatchingexercises for the purposes of preventing and detecting fraud.

78 InordertosupportWelshpublicbodiesintheirfightagainstfraud,theAuditorGeneralrunstheNationalFraudInitiative(NFI)inWalesona biennial basis. The NFI matches data across organisationsandsystemstohelppublicbodiesidentifypotentiallyfraudulentorerroneousclaimsand transactions.


79 TheNFIinWalesisrunincollaborationwithNFIexercises in England, Scotland and Northern Ireland to enable data to be matched across nationalboundaries.Toensureconsistencyofapproach and to minimise duplication of effort, theAuditorGeneralwillcontinuetoco-operatewith other national audit agencies, including on joint development of new data matching modules, sharing data processing arrangements and sharing resources such as staff and technical guidance.

80 All participants in data matching exercises such as theNFI,carriedoutby,oronbehalfoftheAuditorGeneral,willundertaketheirworkinaccordancewith The Code of Data Matching Practice of the Auditor General for Wales.

Question 4Do you agree with the proposed content of Schedule 1 of this Code, which prescribes the way in which certain other functions must be carried out?


81 Auditors of small bodies21willundertakeanexamination of the annual accounts and additional informationandexplanationprovidedbythebodyinordertoenabletheAuditorGeneraltobesatisfiedthat:

a the accounts are prepared in accordance with legislativerequirements;

b proper practices have been observed in the compilationoftheaccounts;and

c thebodyhasmadeproperarrangementsforsecuringeconomy,efficiencyandeffectivenessin its use of resources.

82 Auditors will meet their responsibilities, in accordancewithguidanceissuedbytheAuditorGeneral,by:

a reviewing compliance with the legislative requirementsforthepreparationoftheannualaccounts;

b carryingoutahigh-levelanalyticalreviewoffinancialandotherinformationprovidedtotheauditor;and

c reviewing such additional information and explanationasisnecessarytoprovidesufficientevidencethatthebodyhas

maintained effective governance arrangements andanadequatesystemofinternalcontrolandinternalauditthroughoutthefinancialyear.

83 Where,onthebasisoftheauditor’sreview,theauditorrequiresfurtherevidenceinrelationtoanyrelevantmatter,additionaltestingmustbeundertakentoaddresstheauditor’sconcerns.

84 Whentheauditorhascompletedanexaminationof the annual accounts and additional information and explanation provided, the auditor gives anopinionontheaccountsandcertifiesthecompletion of the audit. On the basis of their review, auditors provide assurance that no matters have come to their attention giving cause for concern that:

a the accounts and other information provided donotproperlypresentorpresentfairlythefinancialaffairsofthebody;

b the accounts and other information provided arenotinaccordancewiththespecifiedrequirements;and

c relevantlegislativeandregulatoryrequirementshave not been met.

Schedule 2: The audit of small bodies

21BodieswitheitherannualincomeorannualexpenditurebelowafinanciallimitdeterminedbytheAuditorGeneral

Question 5Do you agree with the proposed approach to the audit of small bodies prescribed in Schedule 2?


85 ThefollowingflowchartsummariseshowthisCode must be applied to audit and certain other functions of the Auditor General.

Annex: The application of this Code and its scope in terms of functions

Audit functions

Principles of audit

Certain other functions

Schedule 1

General Code

Specific Code

Schedule 2(if applicable)


86 TheprovisionsofthisCodeapplytothefollowingfunctionsonastatutorybasis:

a ExamininganyaccountsorstatementsofaccountsthatfalltobeexaminedbytheAuditorGeneralinaccordancewithprovisionmadeby,orbyvirtueof,anenactment.

b Carryingout,undertakingorpromotingvalueformoneystudiesorexaminationsinaccordancewithprovisionmadebyorbyvirtueof an enactment.

c Those functions contained in, or transferred to the Auditor General under, the following provisions of the Government of Wales Act 1998:

i Section145A(2)(undertakingorpromotingother studies relating to the provision of servicesbycertainbodies);

ii Section145C(8)(disclosinginformationobtainedinthecourseofastudyinrespectof a registered social landlord to the Welsh Ministers);

iii Section145D(providingadviceandassistancetoaregisteredsociallandlord);

iv Section146(transferoffunctionsoftheComptroller and Auditor General in respect ofcertainbodiestotheAuditorGeneral);and

v Section146A(transferetc.totheAuditorGeneralofsupervisoryfunctionsofWelshMinistersinrespectofcertainbodies).

d Those functions contained in the following provisionsofthePublicAudit(Wales)Act2004:

i Part 2 (audit of local government bodies in Wales);

ii Section45(conducting,orassistingtheSecretaryofStateinconducting,benefitadministrationstudies);and

iii Section51(referringmattersrelatedtosocialsecuritytotheSecretaryofState).

e Those functions contained in the following povisions of Schedule 8 to the Government of WalesAct2006:

i Paragraph17(accesstodocuments);and

ii Paragraph20(certificationofclaims,returnsetc.attherequestofabody).


Part 2: Statement of Practice


87 UndertheLocalGovernment(Wales)Measure2009(theMeasure),theAuditorGeneralforWales must prepare a statement of practice that describesthewayinwhichheorsheintendsto exercise improvement audit and assessment functions. Those functions are:

a undertakingimprovementinformationand planning audits, to review whether improvement authorities22 have discharged their duties for publishing improvement planningandperformanceinformation;

b carryingoutimprovementassessments,todetermine whether improvement authorities arelikelytocomplywithlegalrequirementstomakearrangementstosecurecontinuousimprovementintheexerciseoftheirfunctions;and

c co-ordinatingandreportingonimprovementauditandassessmentwork.

88 ThisStatementofPractice(thisStatement)fulfilsthatpurposeandhasbeenpreparedinawaythataccords with the principles set out in the Measure -namelythattheAuditorGeneralwillexercisetheAuditorGeneral’simprovementauditandassessment functions:

a consistentlybetweendifferentimprovementauthorities;

b proportionatelysoasnottoimposeanunreasonable burden on improvement authorities;and

c with a view to assisting improvement authoritiestocomplywiththeirdutiesinrelationto securing continuous improvement.

89 In certain circumstances, the Auditor General maydecide,orberequestedbyWelshMinisters,tocarryoutspecialinspectionsofimprovementauthorities’compliancewiththeirdutiesinrelationto securing continuous improvement. The Auditor GeneralhasvoluntarilyexpandedthisStatementsothatitalsoappliestotheAuditorGeneral’sspecialinspectionwork.

90 The functions to which this Statement relates maybecarriedoutbytheAuditorGeneralormaybe delegated to others23.Consequently,inthisStatementtheterms‘auditor’and‘auditors’applycollectivelyto:

a theAuditorGeneral;

b employeesoftheWalesAuditOffice;and

c anypersonwhoprovidesservicestotheWalesAuditOffice.

91 TheAuditorGeneralwillissuesupplementaryguidance on the application of this Statement, including arrangements for how compliance with this Statement will be assessed.

This Statement describes how auditors must exercise the Auditor General for Wales’ local government improvement audit, assessment and special inspection functions

22Countyandcountyboroughcouncils,NationalParkauthoritiesandfireandrescueauthoritiesinWalesarecollectivelydefinedas‘improvementauthorities’inthe Measure

23TheAuditorGeneralmustprepareaschemetowhollyorpartlydelegateanyoftheAuditorGeneral’sfunctionstoanemployeeoftheWalesAuditOfficeora personwhoprovidesservicestotheWalesAuditOffice


92 Aspartofaco-ordinatedapproachtoauditworkand to accord with the principles set out in the Measure, when exercising local government improvement audit, assessment and special inspection functions, auditors must:

a carryouttheirworkinaccordancewiththeprinciples of being public focused, independent, proportionate, accountable and sustainable, as laidoutintheAuditorGeneral’sCodeofAuditPractice;and

b use the approach prescribed in the General Code section of the Code of Audit Practice for planning,carryingout,reportingandfollowingupontheirwork.

93 Foreachfinancialyear,theAuditorGeneralisrequiredtoproduceatimetableforeachimprovementauthoritysettingoutthedatesand times during which, in his or her opinion, the Auditor General and other relevant external reviewbodiesshouldundertaketheirfunctions(inrelationtotheauthority).Beforeproducingsuchtimetables, auditors will consult with the relevant external review bodies. When producing such timetables,auditorswillseektoensurethattheneeds of the relevant external review bodies in

terms of the proper exercise of their functions are accommodated, and that unreasonable burden is not placed on improvement authorities. Auditors mustsubsequentlytakeallreasonablestepstoadhere to such timetables. This timetabling will not,inanyway,constrainorfettertheAuditorGeneral or other external review bodies in reaching their conclusions and reporting on their findings.

94 Eachyearwhencarryingoutimprovementassessments, auditors will assess whether improvement authorities have given due regard to sustainable development as a central organising principleforstrategicdecisions,andhavetakentheGeneralEqualityDutyintoaccount,intheirarrangements to secure continuous improvement.

95 IftheAuditorGeneralthinksitappropriateinthe light of an improvement audit, assessment orspecialinspection,heorshemaymakerecommendations to the Welsh Ministers to provideassistancetoanimprovementauthorityortogiveitadirection.Auditorswillclearlyoutlinetherationaleformakingsuchrecommendations,based on improvement audit, assessment or inspectionfindings.

Auditors must carry out local government improvement audit, assessment and special inspection work in accordance with the principles and general approach prescribed in the Auditor General’s Code of Audit Practice

Question 6Do you agree with the proposed approach to exercising local government improvement audit, assessment and special inspection functions described in the draft Statement of Practice?

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