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Financial Issues Advisory Group Report
 
 
ANNEX G
 
NOLAN PRINCIPLES AND THE PUBLIC AUDIT MODEL
 
Nolan Principles
 
1. The Committee on Standards in Public Life ("the Nolan Committee") produced five reports covering central government, local public spending bodies, local government, a review of progress on the subjects of the first three reports, and funding political parties. Key points from the reports on accountability and audit matters are:
  • the principles that should underpin public life are selflessness, integrity, objectivity, accountability, openness, honesty and leadership;
  • public money should be able to be tracked wherever it goes;
  • the propriety of all public expenditure should be capable of review by the appropriate public auditing body;
  • true accountability for many local public spending bodies is to the Government and Parliament;
  • internal systems for maintaining standards should be supported by independent scrutiny;
  • new service providers and purchasers should be subject to good auditing using the best principles of public sector audit including performance audit;
  • the Auditor General should be granted inspection rights over all public expenditure;
  • as far as possible a single auditor should be responsible for all aspects of public audit;
  • regulators and funders should place reliance on audit reports in place of their own detailed monitoring; and
  • confidentiality clauses in service and severance contracts are undesirable, and staff should be able to raise legitimate concerns with authorities such as the National Audit Office.
 
The Public Audit Model
 
2. The principles of the public audit model are consistent with Nolan principles in that:
  • external auditors must be independent of the public sector bodies that they are auditing, including independent appointment and remuneration and restrictions on non-audit work;
  • scrutiny committees such as the Committee of Public Accounts should have the support of audit agencies like the National Audit Office;
  • public audit encompasses the propriety and legality of transactions and it includes value for money examinations;
  • audit reports are full, informative and public; and
  • public audit includes local advice to individual bodies and more widespread best practice guidance to sectors.
 

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