Joint Committee on Statutory Instruments Nineteenth Report


Appendix 2

S.I. 2003/533: memorandum from the Office of the Deputy Prime Minister

Accounts and Audit Regulations 2003 (S.I. 2003/533)

10.  The Committee has asked for a memorandum on the following points:

(1) Is it possible that the period of 20 working days referred to in regulation 14(1) (which appears to be the only provision in which the expression "working days" occurs) might include Christmas Day or Good Friday? If so, why does the definition of "working day" in regulation 2(1) not exclude those days?

(2) Regulation 22 provides that contravention of specified regulations is an offence. Identify, as respects each of the requirements imposed by the specified regulations, the nature of the offence and the person by whom that offence is committed.

11.  In practice it is unlikely, given the necessary preparatory work required of the relevant body before the auditor would be in a position to fix a date under regulation 13, that the period of 20 working days referred to in regulation 14(1) would include Good Friday. Neither is it likely that Christmas Day would be included as the usual cycle of an audit process would be further advanced by December. It is nevertheless in theory possible.

12.  The definition is taken from that used in the Regulations that currently regulate these matters, the Accounts and Audit Regulations 1996 (S.I.1996/590), where no reference was made to Good Friday or Christmas Day either. The period for public inspection in those Regulations was slightly shorter, being 15 working days rather than 20.

13.  The Department accepts that although it is unlikely in practice that either Good Friday or Christmas Day would fall within the period during which the 20 days has to be calculated the omission of these two days from the definition of "working day" was an oversight. The Department will bear this in mind should it make any further amendments to these Regulations in the future.

14.  The information requested regarding the regulations specified in regulation 22 is set out below.

Regulation 4 ­ Responsibility for financial management

Requirement imposed:

15.  4(1)  to ensure adequate financial management of the relevant body etc.

16.  4(2)  to conduct a review at least once a year of effectiveness of internal control systems;

to include a statement on internal control with accounts that are published.

Nature of offence:

      

17.  To fail to comply with any of the above requirements.

Person by whom offence may be committed:

18.  The "relevant body" which is defined in regulation 2 as:

"a body whose accounts are required to be audited in accordance with section 2 of the 1998 Act [the Audit Commission Act 1998] other than a body specified in section 98(1) of the National Health Service Act 1977, a local probation board or a Passenger Transport Executive".

Regulation 7 ­ Statement of accounts

Requirement imposed:

19.  7(1) To prepare a statement of accounts for each year in accordance with the various requirements as set out in regulation 7.

20.  7(6) To prepare, in the case of the Common Council of the City of London, a statement of accounts in accordance with the requirements of regulation 7(6).

Nature of offence:

21.  To fail to prepare the required statement of accounts in the required manner.

Person by whom offence may be committed:

22.  In the case of the obligation contained in regulation 7(1): the bodies set out in regulation 7(3) and (4).

23.  In the case of the obligation contained in regulation 7(6), the Common Council of the City of London.

Regulation 9 ­ Other accounting statements

Requirement imposed:

24.  9(1) To prepare an income and expenditure account and balance sheet for the year.

25.  9(3) To prepare either a record of receipts and payments or an income and expenditure account and statement of balances.

Nature of offence:

26.  To fail to prepare the required form of account.

Person by whom the offence may be committed:

27.  In the case of the obligation imposed by regulation 9(1) ­ a body set out in regulation 9(2);

28.  In the case of the obligation set out in regulation 9(3) ­ the parish council concerned or the chairman of the parish meeting (see regulation 2 for the definition of parish meeting).

Regulation 10 ­ Signing and approval of statement of accounts etc

Requirement imposed:

29.  Regulation 10(1) ­ to ensure that the statement of accounts or income and expenditure account etc is prepared in accordance with the regulations.

30.  Regulation 10(2) ­ to sign and date (prior to the relevant body approving the accounts as required in regulation 10(3) or (4)) the statement of accounts etc and certify that it represents fairly the financial position of the body concerned or properly presents the receipts and payments as the case may be.

31.  Regulation 10(3) ­ to arrange for the statement of accounts required by regulation 7 to be approved by resolution of a committee of the body or otherwise by a resolution of the members of the body meeting as a whole by the date set out in the regulation.

32.  Regulation 10(4) ­ to arrange for the income and expenditure account and statement of balances or the record of receipts and payments as required by regulation 9 to be approved by resolution of a committee of the body or otherwise by a resolution of the members of the body meeting as a whole by the date set out in the regulation.

Nature of offence:

33.  Failure to comply with any of the requirements imposed.

Person by whom the offence may be committed:

34.  In the case of regulation 10(1) ­ a relevant body.

35.  In the case of regulation 10(2) ­ the responsible financial officer of the relevant body.

36.  In the case of regulation 10(3) ­ the relevant body to which the obligation in regulation 7 applies.

37.  In the case of regulation 10(4) ­ the relevant body to which the obligation in regulation 9 applies.

Regulation 11 ­ Publication of statement of accounts etc

Requirement imposed:

38.  To publish, as soon as possible and in any event by the date given in regulation 11, the statement of accounts prepared in accordance with regulation 7 together with any certificate, opinion or report made by the auditor; and

39.  To keep copies of the same available for purchase on payment of a reasonable sum.

Nature of offence:

40.  Failure to comply with either of the above requirements.

Person by whom the offence may be committed:

41.  Any of the bodies set out in regulation 11(2).

Regulation 12 ­ Publication of income and expenditure account and receipts and payments

Requirement imposed:

42.  Regulation 12(1) ­ To publish, as soon as possible and in any event by the date given in regulation 12, the income and expenditure account and the statement of balances prepared in accordance with regulation 9(3) together with any certificate, opinion or report made by the auditor; and

43.  To keep copies of the same available for purchase on payment of a reasonable sum.

44.  Regulation 12(3) ­ as soon as possible and in any event by the date given in regulation 12, to display a notice containing the information set out in regulation 12(4) in a conspicuous place or places in the area of the relevant body for at least 14 days; and

45.  To keep copies of such notice available for purchase on payment of a reasonable sum.

Nature of offence:

46.  Failure to comply with any of the above requirements.

Person by whom the offence may be committed:

47.  In the case of the obligation in regulation 12(1) ­ a relevant body as set out in regulation 12(2) or, in the case of a parish meeting, the chairman of that meeting.

48.  In the case of the obligation set out in regulation 12(3) ­ a relevant body referred to in regulation 9(3) (a) or, in the case of a parish meeting, the chairman of that meeting.

Regulation 14 ­ Public inspection of accounts

Requirement imposed:

49.  Regulation 14(1) [which is subject to regulation 14(2)].

50.  To make the accounts and other documents mentioned in section 15 of the Audit Commission Act 1998 available for public inspection for 20 working days before the date appointed by the auditor under regulation 13.

Regulation 14(2)

51.  In the case of the accounts and documents in relation to a period to which regulation 9(3) applies, to make the accounts and other documents mentioned in section 15 of the Audit Commission Act 1998 available for public inspection, on reasonable notice, for 20 working days before the date appointed by the auditor under regulation 13.

52.  The documents mentioned in section 15 of the Audit Commission Act 1998 are: the accounts to be audited and all books, deeds, contracts, bills, vouchers and receipts relating to them.

Nature of offence:

53.  Failure to comply with the obligation imposed by the above regulation.

Person by whom the offence may be committed:

54.  In the case of regulation 14(1), which is subject to regulation 14(2) ­ the relevant body or the chairman of the parish meeting notified by the auditor of the date under regulation 13.

55.  In the case of regulation 14(2) ­ the council of a parish or the chairman of a parish meeting of a parish not having a separate council.

Regulation 15 ­ Alteration of accounts

Requirement imposed:

56.  This regulation imposes a prohibition (other than with the consent of the auditor) on altering the accounts and other documents referred to in regulation 14 after they have been made available for public inspection in pursuance of regulation 14.

Nature of offence:

57.  Altering the accounts in contravention of the prohibition imposed.

Person by whom the offence may be committed:

58.  Any person by whom the accounts are so altered.

Regulation 16 ­ Notice of public rights

Requirement imposed:

59.  Regulation ­16(1) To give notice by advertisement concerning the right to inspect the documents made available in pursuance of regulation 14 and the right to make an objection at audit, in accordance with section 16 of the Audit Commission Act 1998. Such notice must be given at least 14 days before the commencement of the period during which the accounts and other documents are made available for public inspection in pursuance of regulation 14.

60.  Regulation 16(3) ­ to display a notice for at least 14 days in the area of the relevant body concerning the right to inspect the documents made available in pursuance of regulation 14 and the right to make an objection at audit, in accordance with section 16 of the Audit Commission Act 1998.

Nature of offence:

61.  Failure to comply with the obligation to advertise or display a notice as required above.

Person by whom the offence may be committed:

62.  In the case of regulation 16(1) ­ a relevant body to which regulation 11(2) applies or, in the case of a parish meeting, the chairman of the meeting.

63.  In the case of regulation 16(3) ­ a relevant body to which regulation 12(2) applies or which is referred to in regulation 12(3).

Regulation 18 ­ Notice of conclusion of audit

Requirement imposed:

64.  18(1) ­ As soon as reasonably possible after the conclusion of an audit, to give notice by advertisement:

stating that the audit has been concluded;

stating that the statement of accounts is available for inspection; and

giving details concerning the rights conferred on local government electors by section 14 of the Audit Commission Act 1998 (public rights of inspection).

65.  Regulation 18(2) ­ As soon as reasonably possible after the conclusion of an audit, to display a notice in the area of the relevant body for at least 14 days:

stating that the audit has been concluded;

stating that the income and expenditure account and statement of balances or the record of receipts and payments, as the case may be, is available for inspection; and

giving details concerning the rights conferred on local government electors by section 14 of the Audit Commission Act 1998 (public rights of inspection).

66.  Regulation 18(3) requires that where such advertisement is given or notice displayed regarding the rights to inspect the documents made available shall either be the documents amended as a result of the auditor's report or shall include details of any such amendments.

67.  Regulation 18(4) ­ the responsible financial officer of a relevant body must report any material amendments required to the accounts as a result of the auditor's report to the relevant body or the committee of the relevant body that approved the accounts as soon as reasonably practicable.

Nature of offence:

68.  Failure to advertise or display a notice as required (regulation 18(1) and (2)).

69.  Failure to ensure that the accounts made available in accordance with the advertisement or notice and in pursuance of the right of inspection in section 14 of the Audit Commission Act 1998 include details of any amendments required (regulation 18(3)).

70.  Failure to report back to the relevant body or committee on any amendments as required (regulation 18(4)).

Person by whom the offence may be committed:

71.  In the case of regulation 18(1) ­ a body to which regulation 11(2) applies or, in the case of a parish meeting, the chairman of the meeting.

72.  In the case of regulation 18(2) ­ a body to which regulation 12(2) applies or which is referred to in regulation 12(3) or, in the case of a parish meeting, the chairman of the meeting.

73.  In the case of regulation 18(3) ­ a body to which regulation 11(2) or 12(2) applies or which is referred to in regulation 12(3) as the case may be or, in the case of a parish meeting, the chairman of the meeting.

74.  In the case of regulation 18(4) ­ the responsible financial officer of the relevant body concerned.

Regulation 19 ­ Publication of annual audit letter

Requirement imposed:

75.  To publish the annual audit letter received from the auditor as soon as reasonably possible after it is received; and

76.  To make copies available for purchase on payment of a reasonable sum.

Nature of offence:

77.  Failure to publish the audit letter.

78.  Failure to make copies available for purchase.

Person by whom the offence may be committed:

79.  A relevant body.

Regulation 21 ­ Extraordinary audit

Requirement imposed:

80.  Regulation 21(a) ­ to give notice by advertisement where the Commission (defined in section 53 of the Audit Commission Act 1998 as the Audit Commission for Local Authorities and the National Health Service in England and Wales) directs an auditor to hold an extraordinary audit of the accounts of a relevant body.

81.  Regulation 21(b) ­ to display a notice in a conspicuous place in the area of the relevant body where the Commission directs an extraordinary audit of the accounts of a relevant body.

82.  In both cases the information to be included relates to rights of local government electors to attend before the auditor and make objections to the accounts.

Nature of offence:

83.  Failure to advertise or display notice as required.

Person by whom offence may be committed:

84.  In the case of regulation 21(a) ­ a body to which regulation 11(2) applies.

85.  In the case of regulation 21(b) ­ a body to which regulation 12(2) applies or which is referred to in regulation 12(3).

31 March 2003


 
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