PARLIAMENT AND FINANCIAL SCRUTINY

Transcription

1 PARLIAMENT AND FINANCIAL SCRUTINY

2 THE CONSTITUTIONAL FUNCTION OF PARLIAMENT The Westminster System of Government is a representative system of government, that is, it is directly elected by the people. It is also known as Responsible Government Responsible Government is generally characterised by a number of features: an elected parliament or legislature; government chosen from parliament; government answerable to parliament for its actions and those of the public sector; parliament being the ultimate power able to impose laws overriding actions of the government or courts; some government actions requiring approval of parliament and others not; Parliamentary privilege

3 The first fundamental principle of Westminster Responsible Government is the doctrine of Separation of Powers, which divides the institutions of government into three branches: legislative, executive and judicial Each branch s independence helps keep the others from exceeding their power, thus ensuring the rule of law and protecting individual rights. In most Westminster systems, because Ministers are in the Parliament, the distinction between Parliament and the Executive is blurred.

4 Scrutiny of Executive actions is the second underlying principle of the Westminster system The three key principles of scrutiny are taxation without the consent of Parliament is illegal; the concurrence of Parliament is necessary for legislation; and Parliament can inquire into abuses of administration. The danger that Cabinet may use its control over the legislature to usurp parliamentary control of the lawmaking and by implication the spending-power underlies the third key principle of Ministerial responsibility.

5 Under the Westminster system, there are five key functions of parliament: to provide for the formation of a government; to legislate; to provide the funds needed for government; to provide a forum for popular representation; and to scrutinise the actions of government.

6 FINANCIAL SCRUTINY Financial scrutiny of the Executive is the most fundamental, and most important, function of the parliament. The winning of this right took place over centuries, and often came out of requests by the King to fund wars. As the Executive, whose members were within the parliament, replaced the Sovereign as the holder of the taxing and spending powers, there was a need to address how Parliament s oversight role could be best pursued. This led to the first Parliamentary Committee to examine the public accounts The Select Committee of Public Monies - being established By William Gladstone in 1857.

7 Since Gladstone s day, the challenges have continued to increase. The separation of Executive and Parliament has been blurred to the point of being indistinct, the accounts are more complex, public activities more diverse, question time is a set piece designed for the media, but Executive resistance to scrutiny is no less intense. The major pillars of financial scrutiny, the three E s Economy, Efficiency, and Effectiveness. The Modern Public Accounts Committee The modern Public Accounts Committee continues to be the Parliament s primary mechanism for financial scrutiny of the Executive. The PAC s responsibility is an ex post rather than ex ante, that is, it carries out its responsibility by examining public finances after expenditure has taken place.

8 Diagram developed by Dr Rick Stapenhurst of the World Bank Institute.

9 The PAC mandate is commonly to examine the Auditor-General s reports to Parliament and to follow up the issues raised in them. Most PACs need not rely on the Government of the day for references as is the case with other Parliamentary committees and therefore they are able to initiate inquiries into broader aspects of economic management which they may conduct themselves, or suggest that they be undertaken by the Auditor- General. As Standing Committees, PACs have considerable powers of investigation. In general they: are able to summon witnesses have the power to demand that documents they consider relevant to the inquiry hold hearings that are open to the public Title of Presentation, and the Author media

10 Conventionally, PAC inquiries are restricted to the ways in which the funds appropriated by Parliament are actually expended rather than the reasons for that expenditure. Such an emphasis enables PAC members to act as individuals rather than as members of the Government or Opposition. PACs are increasingly becoming engaged in performance audits. These require making qualitative judgements and lead to recommendations that may go far beyond the usual limits of financial management and control.

11 Characteristics of an Effective Public Accounts Committee The World Bank Institute has developed a list of the characteristics that it believes go to make an effective Public Accounts Committee.: Small (5-11 Members) Senior Opposition Chair (fair minded) Committee appointed for term of Parliament Adequately resourced Clarity in roles/responsibilities Meetings open to the media/public hearings, rather than deliberative meetings Strategic planning of work plan Auditor meets with the Committee to highlight aspects of the report; AG a senior advisor Committee may investigate other matters related to financial affairs rather than being restricted purely to matters arising out of Auditor General s reports Reports published, and debated in Parliament.

12 [1] Report of the WA Inc Royal Commission p 2-3 A FINAL OBSERVATION If Public Accounts Committees are to achieve the objective of being the primary mechanism for scrutiny of government, members working on Parliamentary Committees need to be able to distinguish between their roles as members of Parties, and their role as a committee member. The latter role is to represent the Parliament as an entity, and the public generally, in holding executive government to account. The WA Inc Royal Commission, discussed this and said that there existed a " legitimate and natural desire to use the Parliament to embarrass opponents and to obtain electoral advantage." However it also goes on to state "Parliamentary conduct cannot be allowed to subvert Parliament's proper role in the securing of full, fair and accurate information from the Government and from the officers and agencies of government."