Local Audit and Accountability Act 2014
Local Audit and Accountability Act 2014
2014 CHAPTER 2
An Act to make provision for and in connection with the abolition of the Audit Commission for Local Authorities and the National Health Service in England; to make provision about the accounts of local and certain other public authorities and the auditing of those accounts; to make provision about the appointment, functions and regulation of local auditors; to make provision about data matching; to make provision about examinations by the Comptroller and Auditor General relating to English local and other public authorities; to make provision about the publication of information by smaller authorities; to make provision about compliance with codes of practice on local authority publicity; to make provision about access to meetings and documents of local government bodies; to make provision about council tax referendums; to make provision about polls consequent on parish meetings; and for connected purposes.
[30th January 2014]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:-
Part 1
Abolition of existing audit regime
1 Abolition of existing audit regime
(1) The Audit Commission ceases to exist.
(2) The Audit Commission Act 1998 is repealed.
(3) Schedule 1 (abolition of Audit Commission: supplementary provision) has effect.
(4) In that Schedule-
(a) Part 1 makes some arrangements in connection with the abolition of the Audit Commission, and
(b) Part 2 contains consequential repeals and revocations of Acts and instruments that amend the Audit Commission Act 1998.
(5) In this section and that Schedule "the Audit Commission" means the Audit Commission for Local Authorities and the National Health Service in England.
Part 2
Basic concepts and requirements
2 Relevant authorities
(1) In this Act "relevant authority" means a person or body listed in Schedule 2.
(2) The application of this Act to a relevant authority is subject to any note forming part of the entry for that authority in Schedule 2.
(3) The Secretary of State may by regulations amend Schedule 2 by adding, modifying or removing an entry relating to a relevant authority.
(4) Regulations under subsection (3) may add an entry relating to a person or body to Schedule 2 only if that person or body exercises functions of a public nature in relation to an area which is-
(a) wholly in England, or
(b) partly in England and partly in Wales.
(5) The Secretary of State may by regulations or order make provision about the application of this Act or provision made under it to a person or body that comes to fall within Schedule 2 (whether or not as a result of regulations under subsection (3)).
(6) The power in subsection (5) includes power -
(a) to amend this Act or provision made under it in its application to that person or body, or
(b) to make provision for this Act or provision made under it to apply to that person or body with modifications.
3 General requirements for accounts
(1) A relevant authority, other than a health service body, must keep adequate accounting records.
(2) "Adequate accounting records" means records that are sufficient-
(a) to show and explain the relevant authority's transactions,
(b) to disclose at any time, with reasonable accuracy, the financial position of the authority at that time, and
(c) to enable the authority to ensure that any statements of accounts required to be prepared by the authority comply with the requirements imposed by or under this Act.
(3) A relevant authority, other than a health service body, must prepare a statement of accounts in respect of each financial year.
(4) In this Act "financial year" means a period of 12 months ending with 31 March.
(5) The Secretary of State may by regulations-
(a) make provision for the financial year of a relevant authority, other than a health service body, for the purposes of this Act to be such period as is specified in the regulations;
(b) make provision for any requirement in this section not to apply, or to apply with modifications, in relation to the relevant authorities, other than health service bodies, specified or described in the regulations.
(6) Regulations under subsection (5)(a) may-
(a) amend this Act or provision made under it in its application to a relevant authority to which the regulations apply, or
(b) provide for this Act or provision made under it to apply in relation to such a relevant authority with modifications.
(7) Regulations under subsection (5)(a) may make provision in relation to-
(a) all relevant authorities (other than health service bodies);
(b) the relevant authorities specified or described in the regulations.
(8) Section 32 enables the Secretary of State by regulations to make further provision about accounting records and statements of accounts.
(9) In this Act "health service body" means-
(a) a clinical commissioning group;
(b) special trustees appointed as mentioned in section 212(1) of the National Health Service Act 2006 (special trustees for a university hospital or teaching hospital) for a hospital in England (referred to in this Act as "special trustees for a hospital").
4 General requirements for audit
(1) The accounts of a relevant authority for a financial year must be audited-
(a) in accordance with this Act and provision made under it, and
(b) by an auditor (a "local auditor") appointed in accordance with this Act or provision made under it.
(2) In this Act, references to accounts are to be construed in accordance with the following subsections.
(3) In relation to a relevant authority which is not a health service body, "accounts" means-
(a) the authority's accounting records, and
(b) the authority's statement of accounts.
(4) In relation to a clinical commissioning group, "accounts" means-
(a) the annual accounts of the group prepared under paragraph 17(2) of Schedule 1A to the National Health Service Act 2006 (accounts and audit of clinical commissioning groups);
(b) any accounts of the group prepared under paragraph 17(3) of that Schedule in respect of which a direction has been given under paragraph 17(5) of that Schedule.
(5) In relation to special trustees for a hospital, "accounts" means the annual accounts of the trustees prepared under paragraph 3 of Schedule 15 to the National Health Service Act 2006.
5 Modification of Act in relation to smaller authorities
(1) The Secretary of State may by regulations make provision about the audit of the accounts of smaller authorities.
(2) Regulations under subsection (1) may, in particular, provide for any provision of or made under this Act not to apply, or to apply with modifications, in relation to smaller authorities.
(3) Subsection (2) applies to a provision of or made under this Act even if it makes specific provision about a smaller authority to which the regulations apply.
(4) Regulations under subsection (1) may, in particular-
(a) provide for the appointment, by a person specified by the Secretary of State, of a local auditor in relation to the audit of the accounts of a smaller authority;
(b) make provision about the persons that may be specified by the Secretary of State;
(c) make provision about the procedure for specifying a person and for a person's specification to come to an end in specified circumstances;
(d) make provision about the consequences of a person's specification coming to an end, including for the exercise of functions by the Secretary of State and the transfer of the person's rights and liabilities arising by virtue of the regulations to the Secretary of State or another specified person;
(e) confer functions on a specified person, including in relation to-
(i) the appointment of local auditors under the regulations,
(ii) the activities of such auditors, and
(iii) the resignation or removal from office of such auditors;
(f) require a specified person to consult such persons as are specified in the regulations before exercising specified functions;
(g) make provision for the appointment of a local auditor in relation to the accounts of a smaller authority to which arrangements within paragraph (a) apply where the specified person does not make an appointment under the regulations (and in particular for such an appointment to be made by the authority or the Secretary of State).
(5) Regulations under subsection (1) may, in particular-
(a) make provision about the smaller authorities to which arrangements within subsection (4)(a) apply, including provision for them to apply to an authority that has opted into them or has not opted out of them;
(b) make provision about the procedures to be followed in relation to opting into or out of those...
To continue reading
Request your trial