Chapter V: Financial Administration, Accounts and Audit
227.The GLA and the functional bodies will be within the local government framework for financial administration, accounts and audit purposes. Local government accounts and audit arrangements will also apply to the London Pensions Fund Authority. Section 127 to 135 introduce the necessary amendments to the existing legislative provisions reflecting the particular circumstances of each body.
Section 127 to 133: Financial administration
228.Sections 127 to 133 require the GLA and each of the functional bodies to make arrangements for the proper administration of its financial affairs and secure that one of its officers has responsibility for the administration of these affairs (its "chief finance officer"). In most cases, the chief finance officer will be a member of staff with a professional qualification and a member of an approved accountancy body but, in the case of Transport for London and the London Development Agency, provision is made enabling the chief finance officer to be a member of the body rather than a member of staff. A Mayor who chooses to chair TfL must not also be its chief finance officer. The GLA's chief finance officer will be appointed by the Assembly rather than the Mayor. No person may be the chief finance officer of the GLA and a functional body, or of two functional bodies.
229.A chief finance officer of the GLA or a functional body ("relevant authority") will carry out the functions of the post in accordance with the provisions of section 114 of the Local Government Finance Act 1988. He is required to make a report to the relevant authority in respect of decisions involving unlawful expenditure or unlawful actions or unlawful items of account. In preparing the report, the chief finance officer of the GLA, the Metropolitan Police Authority or the London Fire and Emergency Planning Authority should consult the head of paid service and the monitoring officer. The chief finance officer of the London Development Agency should consult its chief executive and the chief finance officer of Transport for London should consult a designated member of the body or of its staff. A chief finance officer will copy reports to each member of the relevant authority (which, in the case of the GLA itself means the Mayor and each member of the Assembly) and, where the report concerns a functional body, to the Mayor and the Chair of the Assembly as well.
230.Section 131 sets out the duties of a relevant authority as regards a chief finance officer's report. A functional body and, in the case of the GLA, the Assembly must consider it at a meeting within a period of 21 days beginning from the day on which copies of the report are sent. The public access provisions of Part VA of the Local Government Act 1972 will apply to such a meeting (and provision is made to apply that Part to Transport for London and the London Development Agency). Where a report is made by the chief finance officer of the GLA, the Assembly will consider it at a meeting which the Mayor must attend. After the meeting, and taking account of the views of the Assembly, the Mayor will decide whether he agrees with the views contained in the report and what, if any, action he proposes to take.
Sections 133 to 135: Accounts and audit
231.Sections 133 to 135 provide that the GLA, the functional bodies and the London Pensions Fund Authority will be subject to audit under the Audit Commission Act 1998 ("the 1998 Act") by auditors appointed by the Audit Commission. The GLA and each of the bodies will be required to keep its own accounts and prepare its own statements of accounts and these will be subject to the full provisions of the 1998 Act, including public inspection, action by the auditor and prevention of unlawful expenditure.
232.The GLA will also prepare a summary statement of accounts in respect of itself, the functional bodies and the LPFA and provision on the form of that statement and other matters will be made in regulations under section 27 of the 1998 Act. To avoid duplication in respect of matters already subject to sections 15 to 24 of the 1998 Act, those sections will not apply to this summary statement.
233.For the purposes of the summary statement, a functional body is required, at the request of the Mayor, to provide the GLA with such information relating to any accounts or statement of accounts as may be specified or described in the request.
234.Schedule 8 contains the individual amendments to the 1998 Act to deal with the application of that Act to the GLA and the functional bodies.
235.Under section 8 of the 1998 Act an auditor is able to make a report on matters coming to his notice where it is in the public interest to do so. Where he does so in respect of a functional body he is required to send a copy to the Mayor as well as to the body. Section 8 reports are considered at a meeting of the body concerned. The public access provisions of Part VA of the Local Government Act 1972 will apply to such a meeting (and provision is made to apply that Part to Transport for London and the London Development Agency).
236.Specific provision is made for a report in respect of the GLA. The Assembly will consider the report at a meeting, which the Mayor must attend. After the meeting the Mayor will decide whether the report requires the GLA to take any action and what if any action to take. In taking his decision the Mayor must take account of any recommendations made by the Assembly. The duties imposed on the Mayor and the Assembly must be performed within four months, although an auditor may allow more time for consideration.
237.The GLA and the functional bodies will be able to request the Commission to conduct a study to promote economy, efficiency and effectiveness in the use of resources. There is also to be a provision for the Mayor to request that such a study be carried out in respect of a functional body. Before exercising this power the Mayor will consult the Assembly, the functional body and such associations of employees as appear to him appropriate. The costs of any study commissioned by the Mayor will be met by the GLA.