Audit Committee Memorandum of Understanding with the Northern Ireland Audit Office
Published May 2026
1. Introduction
1.1 This Memorandum sets out the understanding of the Northern Ireland
Audit Office (NIAO) and the Northen Ireland Assembly Audit Committee (the
Audit Committee) of the framework for the corporate governance and
accountability of the NIAO.
1.2 This Memorandum replaces the previous Memorandum signed by the
Comptroller and Auditor General (C&AG) and the Chair of the Audit Committee
on 29 July 2015.
1.3 The NIAO, which is totally independent of government, seeks to hold
public bodies to account for the way they use public money. It provides
objective information, advice and assurance on how public funds have been
used and encourages high standards in financial management, good
governance and propriety in the conduct of public business.
1.4 The NIAO is headed by the C&AG, an Officer of the Northern Ireland
Assembly (the Assembly). The C&AG and her staff are the external auditors of
all Northern Ireland Departments, executive agencies and other central
government bodies, including non-departmental public bodies and health and
social care bodies. In addition, a senior member of staff of the NIAO is
designated by the Department for Communities as the Local Government
Auditor and is responsible for the audit of councils and other local government
bodies. A Code of Audit Practice (Local Government), approved by the
Assembly, which sets out the framework for auditing local government bodies in
Northern Ireland, is updated and published every five years.
1.5 The NIAO recognises the importance of being exemplar in the handling
of its own affairs and retaining its credibility with the Assembly, audited bodies
and other stakeholders. It is committed to adhering to the highest standards of
corporate governance and accountability, underpinned by transparency, and
promoting and securing value for money in its use of public funds.
1.6 The Audit Committee is a Standing Committee established in accordance
with paragraph 10 of Strand One of the Belfast Agreement and under Assembly
Standing Order No. 58. In respect to the NIAO, the Audit Committee has the
power to:
• exercise the functions mentioned in Section 66(1) of the Northern
Ireland Act 1998. The Committee therefore agrees the annual
estimate of the use of resources of the NIAO and lays it before the
Assembly; and
• table a motion in respect of the salary of the C&AG.
Oversight of the NIAO’s financial performance against the Estimate is carried
out by the Assembly Audit Committee.
1.7 The purpose of this Memorandum is to set out:
• the values and standards of the NIAO in carrying out its work; and
• the commitments of the C&AG and the NIAO to the Audit Committee
on its internal governance arrangements including the actions they will
take to uphold transparency and manage public money effectively, and
in doing so to provide confidence to the Assembly and wider public
regarding the arrangements for the governance and accountability of
the NIAO.
• To outline the Audit Committee’s role in relation to the NIAO.
2. How the NIAO will carry out its business
2.1 In support of the achievement of its aims and objectives, the NIAO will
maintain systems of governance, risk management and internal controls
consistent with best practice, monitor that the systems are operating effectively
and report on the systems in the Governance Statement in its Annual Report
and Accounts. It will endeavour to conduct its business in an economic,
efficient and effective way.
2.2 The NIAO is funded by the Assembly. The C&AG, as Accounting Officer
for the NIAO, will fulfil the responsibilities assigned to her in Managing Public
Money Northern Ireland, including assuring the Assembly and the public of high
standards of probity in the management of public funds.
2.3 The NIAO has its own Code of Conduct based on the Nolan Principles,
developed by the Committee on Standards in Public Life. NIAO’s Code of
Conduct reinforces the core values and standards of its work and provides a reference point for decisions and courses of action in carrying out its statutory
and professional responsibilities. Further detail on the NIAO Code of Conduct
can be obtained from NIAO’s website.
3. Governance arrangements
Role of the Comptroller and Auditor General
3.1 The C&AG is head of the NIAO and a Crown appointment made on the
nomination of the Assembly. The C&AG is responsible for auditing Northern
Ireland’s central government public sector organisations as defined in various
pieces of legislation.
3.2 The C&AG carries out examinations of the economy, efficiency and
effectiveness with which central government bodies use their resources and
reports the results of her work to the Assembly. The C&AG must be
independent of government and operate in an apolitical manner. The C&AG is
an Officer of the Assembly, and her powers and duties are set out in
legislation. An overview of the main statutory provisions is as follows:
Northern Ireland Act 1998
This lays out the means of appointing the C&AG and provides that, in exercising
her functions, except for any function conferred on her of preparing accounts,
she shall not be subject to the direction or control of any Minister or Northern
Ireland Department or the Assembly.
The C&AG has complete discretion in the discharge of her statutory audit
functions. Responsibility for all audit opinions and judgements rests with the
C&AG alone.
Audit (Northern Ireland) Order 1987
This Order:
• provides for the C&AG to be a corporation sole;
• established the NIAO to support the C&AG in the discharge of her
statutory functions;
• allows for the C&AG to examine and report to the Assembly on whether
public bodies have used resources economically, efficiently and
effectively;
• provides for the NIAO Estimate to be agreed between the C&AG and the
Audit Committee; and
• requires the Department of Finance (DoF) to appoint the Accounting
Officer, who is responsible for preparing the NIAO resource accounts,
and to appoint the external auditor of the NIAO.
Government Resources and Accounts Act (Northern Ireland) 2001
This Act provides for the C&AG to authorise the issue of public funds by the
DoF from the Northern Ireland Consolidated Fund to Northern Ireland
departments and others (the ‘Comptroller’ function); and for the C&AG to audit
the financial statements of all Northern Ireland departments. Other legislation
requires individual public bodies to be audited annually by the C&AG.
Local Government (Northern Ireland) Act 2014
The Local Government (Northern Ireland) Act 2014 updated the Local
Government (Northern Ireland) Order 2005 and provides that the Department
for Communities may, with the consent of the Comptroller and Auditor General,
designate a member of NIAO staff as the Local Government Auditor. The Act
expanded the statutory roles and responsibilities of the Local Government
Auditor to include performance audits of councils.
3.3 As head of the NIAO and with primacy of authority vested in her statutory
position as corporation sole, the C&AG is responsible for putting in place
internal governance structures to support her in the delivery of her
functions. The arrangements established are detailed below.
NIAO Advisory Board
3.4 The Advisory Board is responsible for providing objective and impartial
advice to the C&AG to assist her in the discharge of her functions and works in
partnership with the C&AG and the Senior Leadership Team (SLT). The Board scrutinises the work of the NIAO in accordance with the Code (Corporate Governance in Central Government Departments: Code of Good Practice NI 2025, Managing
Public Money Northern Ireland and Audit and Risk Assurance Committee Handbook (NI) HMT Orange Book: https://www.gov.uk/ government/ publications/orange-book), with the
objective of providing constructive challenge. It also scrutinises and advises on
NIAO finances on an ongoing basis.
3.5 The Advisory Board comprises four non-executives, the C&AG and the
COO, the former bringing an independent and external perspective to the work
of the Board. The Chairperson of the Advisory Board is appointed by the
C&AG, in conjunction with the Assembly Audit Committee, through open
competition.
3.6 Each member is appointed for a three-year period, which may be
extended for a maximum of a further three years by the C&AG with the
endorsement of the Assembly Audit Committee.
3.7 To support its functions, the Advisory Board has established two
subcommittees, an Audit and Risk Assurance Committee (ARAC) and a
Remuneration Committee. Details of the roles of these sub committees are on
the NIAO website.
3.8 Should it chose to do so the Assembly Audit Committee shall have the
opportunity to meet with the non-executive members of the Advisory Board as
and when required and the Chairperson of the Board will have access to the
Assembly Audit Committee.
3.9 NIAO will appoint an internal auditor, to independently carry out an audit
function to comply with Government Internal Auditing Standards.
Senior Leadership Team
3.10 The Senior Leadership Team (SLT), which comprises the C&AG, the
Chief Operating Officer (COO) and Directors, is responsible for the strategic
leadership of the NIAO and assists the C&AG in the effective oversight of the
operational management of the NIAO. Subject to the C&AG’s statutory position
as a corporation sole and head of the NIAO, the team is the principal
mechanism for directing business and decision making in the NIAO.
Corporate Management Team
3.11 The SLT is supported by a Corporate Management Team (CMT)
comprising Managers and Heads of Service, who are responsible for
operational leadership and contributing to the strategic leadership within the
NIAO.
4. Accountability
4.1 The C&AG is a ‘corporation sole’. While NIAO staff assist in the
discharge of her functions, all legal powers, rights and duties are vested in the
office of Comptroller and Auditor General.
4.2 In her role as Accounting Officer for the NIAO, the C&AG is responsible
for preparing the NIAO’s annual report and accounts and submitting them to the
external auditor, who certifies them. The annual report and accounts are then
laid before the Northern Ireland Assembly by DoF. Additionally, the external
auditor may be requested to carry out economy, efficiency and effectiveness
examinations of the use of resources by the NIAO (value for money
studies). The external auditor’s reports on these examinations will be provided
to the Assembly Audit Committee, who may consider sharing these with the
Northern Ireland Assembly’s Public Accounts Committee (PAC).
4.3 In addition, the NIAO commits to publish on its website:
• Terms of Reference and minutes of the meetings of the Advisory Board,
the Audit and Risk Assurance Committee and the Senior Leadership
Team;
• a summary of information relating to Registers of Interest and the
provision and receipt of gifts and hospitality by non-executive members,
the C&AG and other members of the SLT; and
• a summary of travel and subsistence expenditure for the C&AG, non
executive members and the SLT.
4.4 The Assembly Audit Committee is required to agree the Estimates of the
NIAO and lay them before the Assembly. It also scrutinises the draft budget of
the NIAO. In performing these responsibilities , it will:
• consider the estimate prepared by the C&AG of the use of resources by
NIAO for the next financial year. In doing so, it shall have regard to the
advice of PAC and DoF;
• subject to any modifications agreed between the Committee and the
C&AG, lay the annual estimate before the Assembly;
• consider NIAO corporate plan, setting out the NIAO’s key strategic aims;
how the NIAO propose to deliver these aims; the resources that are
required by the NIAO to do so; and their key performance measures;
• examine the NIAO annual report and accounts and consider the external
auditors certificate and opinions;
• advise on the commissioning of any value for money studies to be
undertaken by the external auditor on NIAO’s use of resources;
• consider the external auditor’s reports on any value for money studies;
• examine NIAO’s in year financial monitoring returns;
• table a motion in the Assembly in respect of the salary of the C&AG;
• provide advice to DoF on the appointment of the NIAO external auditor;
• have the opportunity to meet with NIAO Advisory Board non-executives
as and when required;
• examine any other matter relevant to the NIAO’s financial performance;
and
• publish its own reports as appropriate.
4.5 The NIAO commits to draw to the attention of the Audit Committee any
serious or significant governance and accountability matters relating to the
NIAO as soon as practicable.
4.6 The NIAO will give evidence at the hearings of the Audit Committee on
the Corporate Plan, Estimate and Annual Report and Accounts, and on any
other matter that falls within the role and responsibilities of the Audit Committee.
5.Review
5.1 This MOU may be considered for review, by agreement between the two
parties, at the beginning of each Assembly Mandate and at any other time if
required.
Signed by
Ms Dorinnia Carville, Comptroller and Auditor General on 20 April 2026,
And
Mr Alan Chambers MLA, Chair of the Audit Committee of the Northern Ireland
Assembly, on 20 April 2026.