Audit Commission Act 1998

20 Other bodies: prohibition orders

(1) The auditor for the time being of the accounts of a body subject to audit other than a health service body may issue an order under this section (a “prohibition order”) if he has reason to believe that the body or an officer of the body—

(a) is about to make or has made a decision which involves or would involve the body incurring expenditure which is unlawful;

(b) is about to take or has taken a course of action which, if pursued to its conclusion, would be unlawful and likely to cause a loss or deficiency; or

(c) is about to enter an item of account, the entry of which is unlawful.

(2) For the purposes of this section and section 22, the actions of—

(a) a committee or sub-committee of a body, or

(b) any other person (other than an officer) authorised to act on behalf of the body,

are to be treated as the actions of the body itself.

(3) A prohibition order is an order which—

(a) is addressed to the body or officer concerned;

(b) specifies the paragraph of subsection (1) which is relevant and the decision, course of action or item of account to which the order relates;

(c) specifies the date on which (subject to subsection (6)) the order is to take effect, which must not be earlier than the date of service of a copy of the order in accordance with paragraph (a) or (as the case may be) paragraphs (a) and (b) of subsection (5); and

(d) requires the body or officer concerned to desist from making or implementing the decision, taking or continuing to take the course of action or entering the item of account in question (as the case may be).

(4) Where two or more auditors are appointed in relation to the accounts of any body—

(a) the power to issue a prohibition order may be exercised by the auditors acting jointly or by such one of them as they may determine; and

(b) in relation to such an order, references in subsections (5) and (6) to the auditor are references to the auditor or auditors by whom the order is issued.

(5) A copy of a prohibition order—

(a) shall be served on the body to which, or to an officer of which, it is addressed;

(b) in the case of an order addressed to an officer, shall also be served on him; and

(c) may be served on such other person or persons as the auditor considers appropriate.

(6) A prohibition order does not have effect unless, not later than the end of the period of seven days beginning on the date of service referred to in subsection (3)(c), the auditor serves on the body concerned and on any officer on whom a copy of the order was served under subsection (5)(b), a statement of the auditor’s reasons for the belief referred to in subsection (1).

(7) Where this section requires a copy of an order or statement to be served on an officer of a body, it shall be served on him by addressing it to him and delivering it to him or leaving it at, or sending it by post to, the office at which he is employed.

(8) A prohibition order may at any time be revoked (but not varied) by the person who is for the time being the auditor in relation to the accounts of the body to which, or to an officer of which, the order was addressed.