7 May 2003
NOTE ON OUTCOME OF CONSULTATION ON GOVERNMENT’S PROPOSAL TO MAKE THE COMPTROLLER AND AUDITOR GENERAL THE STATUTORY AUDITOR OF SPECIAL HEALTH AUTHORITIES UNDER THE GOVERNMENT RESOURCES AND ACCOUNTS ACT 2000
Introduction
1. The Treasury carried out a consultation process on the Government’s intention to seek Parliamentary approval for two Orders introduced the Government Resources and Accounts Act 2000. The first Order would transfer statutory audit responsibility for Special Health Authorities (SHAs) from the Audit Commission to the Comptroller and Auditor General (C&AG). The second Order would end the need for separate summarised accounts to be prepared for SHAs (apart from two SHAs which, for technical reasons, cannot legally be included in the Order.)
Consultation results
2. A consultation document on these proposals was issued on 9 December 2002 to the SHAs and other stakeholders including the Audit Commission, the National Audit Office and the Department of Health. The consultation document was also posted on the Treasury’s website. The closing date for comments was 4 February 2003.
3. Comments were received from about half of the SHAs. There was general support for the proposals on the grounds that they would lead to administrative savings overall, although several SHAs sought re-assurance that individual SHAs would not face increased audit costs. There was concern from some SHAs at the loss of audit experience, and on future arrangements for value for money work. Points were also raised relating to the particular circumstances of individual SHAs.
4. In response to these comments the Government notes that:
on audit fees -
the C&AG has indicated that he has no intention of increasing fees to individual SHAs, other than for inflationary pressures, unless the scale and complexity of activities increase;
on audit experience -
the C&AG already has considerable experience of the sector since he currently undertakes the audit of the Summarised Accounts of SHAs and is also auditor of the Department of Health;
on format of accounts -
the SHA accounts will follow accounts directions issued by the Secretary of State for Health with the agreement of the Treasury. No significant changes to individual accounts are expected to result from the proposed Orders, and the C&AG will work with individual SHAs to ensure consistency of treatment;
on consultation about audit arrangements -
the C&AG, in undertaking an audit on behalf of Parliament, recognises that auditees are stakeholders in the audit process; intends to ensure that their views are sought, for example, when an audit of a SHA is considered for contracting out; will discuss with relevant stakeholders the conclusions arising from his audit work; and will be responsible for reaching the audit opinion and for overseeing the audit quality during each audit;
on vfm studies -
the C&AG has already conducted selective vfm work on SHAs, and will be continuing under his existing statutory powers to undertake for Parliament vfm studies in the NHS - including the SHAs - at his own initiative and at no cost to SHAs themselves.
5. The Government further notes that the C&AG has indicated his intention to provide the same level of service to the SHAs after the transfer of audit responsibility as they currently receive, and to undertake non-audit work where requested, subject to agreement with the individual SHAs.
Government’s conclusions
8. The Government has concluded that the main concerns of the bodies who responded are adequately addressed under the intended new arrangements, and has therefore proceeded with the introduction in Parliament of the Orders on audit along the lines indicated in paragraph 1. At the same time the Government has amended the Regulatory Impact Assessment (RIA) accompanying these Orders in the light of the comments made by the respondents.
The Regulatory Impact Assessment is available below in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website.
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