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Propriety and Audit in the Public Sector
A Paper by the Public Audit Forum

The Public Audit Forum (PAF) has today published a revised version of its paper, 'Propriety and Audit in the Public Sector'. This follows a public consultation exercise aimed at promoting a common understanding of what constitutes propriety in the UK public sector. The Forum's paper sets out to help public sector managers understand what is expected of them and clarify the type of work that auditors of public sector bodies may undertake in this area.

The report sets out:

  • the concept of propriety, including definitions, Parliament's expectations and sources of guidance on propriety such as the work of the Public Accounts Committee and the Committee on Standards in Public Life;
  • safeguards against failures of propriety to ensure that generally high standards are maintained. These include the general ethos of the organisation, appropriate control and governance arrangements, and codes of conduct, together with external safeguards;
  • illustrations of the concept of propriety with reference to types of failure in propriety. The paper analyses: unfairness, such as in the treatment of staff; misuse of public resources for personal or political purposes; and poor stewardship of public resources. It also explores the underlying causes of failures of propriety, for example, ignorance of the rules or expectations of proper behaviour;
  • how audit relates to propriety, including the roles of auditors, boards and other governing bodies, the role of internal audit and how propriety is relevant to the financial statements audit. It also covers the aims and approaches of specific reviews of propriety and the procedures auditors should follow when possible impropriety is discovered.

Gilbert Lloyd, a partner at KPMG and chairman of the working group that prepared this paper, said,

"This paper, which has been revised to incorporate the views of a wide range of organisations and individuals, should help to encourage a common understanding of propriety for those involved in the governance and audit of organisations in the public sector."

NOTES TO EDITORS:

Public sector audit has a key part to play in safeguarding public money, ensuring proper accountability, upholding proper standards of conduct in public services and helping public services achieve value for money.

The Public Audit Forum, which was established in 1998, represents the six national audit agencies: National Audit Office; Audit Commission; Auditor General for Scotland; Accounts Commission for Scotland; Auditor General for Wales and the Northern Ireland Audit Office. The Forum's overall aim is to provide a focus for developmental thinking about public audit.

The Public Audit Forum has a remit to build on the existing co-operation between the national audit agencies, to enhance the efficiency and effectiveness of public audit, to provide a strategic focus on issues cutting across their work and to develop common standards for public audit. This paper was prepared by a consultative forum that draws on the experience and expertise of public auditors, the bodies they audit, the auditing profession and the wider community.

This paper, and other information about the Forum, is available on its web site at www.public-audit-forum.gov.uk.

The Public Audit Forum welcomes comments on its paper. These may be sent to the Public Audit Forum Secretariat, B361, 157-197 Buckingham Palace Road, Victoria, London SW1W 9SP or comments may be emailed to james.bromiley@nao.gsi.gov.uk

Press Enquiries to Keith Davis on 020 7798 7400

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