AS YOU may be aware of from recent press reports, the Wales Audit Office has a £1m black hole because of pension liabilities that were not disclosed in its annual accounts. To say that this is a problem for Huw Vaughan Thomas, the new Auditor General for Wales who only started his job on the 1st of October, is an understatement.
According to evidence we received on the Public Accounts Committee yesterday, the management committee of the Wales Audit Office, the interim Auditor General, or the internal audit and risk management committee were not told about a severance package of a former employee. A Freedom of Information submission from Leanne Wood AM sparked this whole debate, showing that the severance payment of this former employee of the Audit Office did not appear in the Wales Audit Office accounts. We are informed that the payment to the former staff member is legal, but that the processes by which this was carried out did not conform to International Auditing Standards – standards that the Wales Audit Office demands of its public sector clients.
Much of the evidence that we took yesterday in committee had to take place in private session due to the ongoing case of the former Auditor General, Jeremy Coleman, who is alleged to have had indecent pictures on his work computer, and alleged to have possessed indecent photographs. A full and frank questioning session took place, and will be in the public domain following the court case.
Whatever can or cannot be discussed in public at the moment, the truth is that the way in which the Wales Audit Office operated did not comply with International Auditing Standards, and it is right and proper that this is investigated. I am astonished that in an office of auditors, this was a practice that has only now been identified. Naturally, people will question how an auditing body can criticise other public bodies for failing to adhere to internationally agreed rules if they do not adhere to them also.
People who avidly watch Senedd TV or read transcripts of the Public Accounts Committee will know that for some time I have been calling on the committee to look in to the governance arrangements and management structures of the Wales Audit Office. I called for it after hearing concerns from the trade union Prospect at allegations of bullying at the Wales Audit Office, and of staff grievances going unheard. It has been deeply frustrating that such an inquiry has not initiated, and that I have been told time and again that such issues should not concern the Public Accounts committee. Recent events clearly tell us that it is our interest to carry out work in this area.
I have been informed that we need additional powers as a committee to carry out this work – powers that a Welsh Minister could have applied for if the Constitutional Reform Bill had been passed in the wash up of the previous UK Parliament (I believe Andrew Davies AM, the former Finance Minister, had every intention of seeking such powers) We are yet to see whether a bill by the new UK government will be introduced to allow for such powers to be sought by the Welsh Government, but I will certainly be lobbying for this on the committee.
We can’t lose sight of the fact that there are talented people who work for the Wales Audit Office, but there is a huge job to do in restoring faith in the Wales Audit Office following these revelations. Of course its welcoming to see that the new Auditor General is going to change the governance arrangements at the office, and that he is going to establish a new remuneration board. But this is motivation from one individual following lobbying by key individuals and trade unions. What is to say that when he leaves that any of the practices introduced will remain?
It is without doubt that our committee will return to this matter in the near future, notwithstanding the fact that we have questions to ask of the external auditors who accepted the accounts of the Audit Office when they did not comply with international standards. Who audits the auditors has been a question that has been asked for far too long, and this must be answered now. The recent Peer review commissioned by the former Auditor General did not, from what I read in the report, assess the accounts of the Wales Audit Office either, although it did address many of the governance issues. This matter can’t wait any longer to be addressed.
