RESTRICTED/ADMIN IN CONFIDENCE
Chapter 5 Section D (audit and other financial matters), paragraph 2 of the FCO hand-book "Dependent Territories Departmental Practice" rules that the advice of the Audit Adviser should be sought on all matters of audit but that this does not relieve the Dependent Territories departments and the Accounts and Finance departments from the responsibility of examining the audited accounts of Dependent Territories. The Adviser studies the accounts in conjunction with the local auditor's report, comments when necessary and suggests any further action that may need to be taken. In view of the increasing discretion given to territories in the management of their own affairs the general approach is to leave matters of detail to them and to confine action to matters which affect the use of UK funds or which are otherwise of major importance.
21.
The Adviser on Audit is also consulted both by departments of the Dependent Territories Division and by territorial governments on questions of accounting technique, interpretation and amendment of regulations, and briefing on finance and audit requirements at various stages of constitutional development. "Dependent Territories Departmental Practice" rules that the General section of Gibraltar and General department (to which the Adviser is attached) should provide a point of reference and coordination for general financial questions and questions of financial policy.
22.
Since the Adviser on Audit is attached to a Joint department his services are properly available to the FCO and ODM alike. We found, however, that occasionally the services requested by the ODM extend beyond the sphere of the Dependent Territories. The Head of the Finance depart- ment of the ODM recently suggested that the Adviser's terms of reference should be widened to enable him to perform a professional function analagous to the role of the ODM's own professional advisers and to give advice as necessary to accounts and audits officers provided by the ODM to independent countries overseas under technical assistance arrangements.
23. Mr Carter is now engaged on the arrangements for a conference of Inspectors of Audit from the Dependent Territories to be held in London in April this year.
24.
It is clear that the case for retaining Mr Carter's services should rest on the advice which he provides for the checking of Dependent Territories' accounts. It has been represented to us that no other audit advice is available ie that audit advice is still essential in spite
8.
RESTRICTED/ADMIN IN CONFIDENCE
/of the