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Principle

The public body complies with all applicable statutes and regulations, and other relevant statements of best practice.

Supporting provisions The public body must comply with all statutory and administrative requirements on the use of public funds. This includes the principles and policies set out in the HMT publication “Managing Public Money”2 _and Cabinet Office/HM Treasury spending controls.

The British Council is a public corporation and an executive non- departmental public body. It is sponsored by the Foreign and

Commonwealth Office, from which it has operational independence. The relationship is set out in the FCO/British Council Management Statement and the Financial Memorandum. These documents set out how the British Council complies with statutory and administrative requirements for the use of public funds.

See also Review section on Value for Money (page 29)

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135 The public body

must operate within the limits of its statutory authority and in accordance with any delegated authorities agreed with the sponsoring department3.

The FCO/British Council Financial Memorandum includes Delegated Authorities (as discussed and agreed by HMT/FCO/BC in clarification meetings/discussions)

The public body should operate in line with the statutory requirements and spirit of the Freedom of Information Act 2000. It should have a comprehensive Publication Scheme. It should proactively release information that is of legitimate public interest where this is consistent with the provisions of the Act.

For the purposes of the FOIA the Government has designated the British Council as a public authority. The British Council answers its own Freedom of Information enquiries. It has a Publication Scheme, but in light of the Review’s findings and recommendations on

transparency, this will need to be reviewed by the FCO sponsoring department, Communication Directorate.

The British Council does not currently publish/release any Open Data (data that is re-usable) in line with the changes to the Freedom Bill 2013.

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For NDPBs established as companies, or which have charitable status, Departments should also ensure that the public body is fully compliant with relevant statutory and administrative requirements.

136 The public body

must be compliant with Data Protection legislation.

See page 55 of the 12-13 Annual Report, which states that the British Council is in compliance with its legal obligations and the standards and requirements set out by the Cabinet Office. The Senior Information Risk Owner is a member of the Executive Board and chairs the Information Assurance Committee. In January 2013 one attempt to gain

unauthorised access to a British Council system was successful and a major investigation was launched. This found that the site contained limited personal data and that no harm was likely to have been caused by the breach. The British Council continues to strengthen its IT security arrangements.

The public body should be subject to the Public Records Acts 1958 and 1967.

The British Council states in the 2012-13 Annual Report that it is compliant (“we are committed to protecting and using our information securely and effectively, in compliance with our legal obligations and the standards and requirements set out by the Cabinet Office”- p 55 of the AR). Cabinet Office requirements include reference to the Public Record Acts of 1958 and 1967.

Accountability for Public Money Principle

The Accounting Officer of the public body is personally responsible and accountable to Parliament for the use of public money by the body and for the stewardship of assets.

137 There should be

a formally designated Accounting Officer for the public body. This is usually the most senior official (normally the Chief

Executive).

The Chief Executive is the designated Accounting Officer for the British Council. (The responsibilities of the Chief Executive as Accounting Officer are set out in 2.6 of the FCO/British Council Management Statement.)

138 The role, responsibilities and accountability of the Accounting Officer should be clearly defined and understood. The Accounting Officer should have received appropriate training and induction. The public body should be compliant with the requirements set out in “Managing Public

Money4”, relevant

Dear Accounting Officer letters and other directions. In particular, the Accounting Officer of the NDPB has a responsibility to provide evidence- based assurances required by the Principal Accounting Officer (PAO). The PAO requires these to satisfy him or herself that the Accounting Office responsibilities are appropriately discharged. This includes, without reservation, appropriate access of the PAO’s internal audit service into the NDPB.

The responsibilities of the Chief Executive as Accounting Officer are set out in 2.6 of the Management Statement and in the Financial

Memorandum. These responsibilities, including for the propriety and regularity of the public finances and for the keeping of proper records, are carried out in accordance to Chapter 4 (Accounting Officer) of

Managing Public Money.

FCO Internal Audit and team scrutinise the BC Audit Committee papers and liaise quarterly with BC Internal Audit. The FCO Head of Internal Audit’s report to the FCO Principle Accounting Officer includes consideration of the audit frameworks of all FCO NDPBs, and comments on the adequacy of those arrangements.

Also see the Review findings and recommendations on Accountability, page 28

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139 The public body

should establish appropriate arrangements to ensure that public funds: are properly safeguarded; used economically, efficiently and effectively; used in accordance with the statutory or other authorities that govern their use; and

deliver value for money for the Exchequer as a whole.

Specified in the FCO-British Council Management Statement and Financial Memorandum.

The trustees’ responsibilities include keeping proper accounting records. These disclose with reasonable accuracy at any time the financial position of the British Council and enable it to ensure that the financial statements comply with Accounting and Reporting by Charities: Statement of Recommended Practice (revised 2005) (SORP) and United Kingdom Generally Accepted Accounting Practice (UK GAAP). The trustees are also responsible for safeguarding the British Council’s assets and hence for taking reasonable steps for the prevention and detection of fraud and breaches of law and regulations. Page 54 of the 2012-13 Annual Review refers to a significant fraud case uncovered in Nigeria in 2012. As a result, the British Council commissioned an external review of its control framework to identify areas for

improvement and to strengthen management of financial risk. The consultants, Grant Thornton, reported that appropriate building blocks for the corporate control environment did exist in the Council but 'less process and more intelligence' was needed to help those charged with governance understand and manage the key business and financial risks associated with change, growth and high risk environments. They advised that capability, organisational structure and lack of clarity

around roles and accountability needed to be addressed. The Council has already taken some steps to address control weaknesses identified in Nigeria. The consultants judged that the British Council’s Global Finance Change Programme would also help.

140 The public body’s

annual accounts should be laid before Parliament. The Comptroller and Auditor General should be the external auditor for the body.

The Annual Report is laid before Parliament and the Comptroller and Auditor General is the external auditor.

Ministerial Accountability Principle

The Minister is ultimately accountable to Parliament and the public for the overall performance of the public body.

Supporting provisions The Minister and sponsoring department should exercise appropriate scrutiny and oversight of the public body.

The British Council is a public corporation and an executive non- departmental public body (NDPB). It is sponsored by the Foreign and Commonwealth Office, from which it has operational independence. The relationship is set out in the Management Statement and the Financial Memorandum.

See also Review „Accountability‟ heading and the recommendation on page 28.

141 Appointments to

the board should be made in line with any statutory requirements and, where appropriate, with the Code of Practice issued by the Commissioner for Public Appointments.

In accordance with the Royal Charter the Board elects trustees following an open recruitment process (see 2.10 of the Management Statement). The appointment of the Chair is made in line with the Code of Practice issued by the Commissioner of Public Appointments (ref 2.11 of the Management Statement). Under the terms of the Royal Charter the Foreign Secretary has the right to nominate one trustee to the Board. This is now the FCO’s Chief Operating Officer.

The Minister will normally appoint the Chair and all non-executive board members of the public body and be able to remove individuals whose performance or conduct is unsatisfactory.

The Foreign Secretary gives prior approval to the appointments to the offices of Chair (see 2.11 of the Management Statement). The NED Chair of the BC appoints the other non-exec Board members.

142 The Minister should be consulted on the appointment of the Chief

Executive and will normally approve the terms and conditions of employment5.

The Foreign Secretary gives prior approval for the appointment and term of office of the Chief Executive Officer (see 2.3 of the Management Statement ).

The Minister should meet the Chair and/or Chief Executive on a regular basis.

The Foreign Secretary should meet the Chair (at least) annually, as set out in the Management Statement (2.11), and may also meet the BC Chief Executive.

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Where the Chief Executive will also be Accounting Officer for the public body, the Principal Accounting Officer in the sponsor Department (usually the Permanent Secretary) should also be consulted.

143 A range of

appropriate controls and safeguards should be in place to ensure that the Minister is consulted on key issues and can be properly held to account. These will normally include:a requirement for the public body to consult the Minister on the corporate and/or operational business plan;a requirement for the exercise of particular functions to be subject to guidance or approval from the Minister;a general or specific power of Ministerial direction over the public body; a requirement for the Minister to be consulted by the public body on key financial decisions. This should include proposals by the public body to: (i) acquire or dispose of land, property or other assets; (ii) form subsidiary ompanies or bodies corporate; and (iii) borrow money; and a power to require the production of information from the public body which is needed to answer satisfactorily for the body’s affairs.

The Foreign Secretary approves the British Council Corporate Plan (which encapsulates the key forward financial plans). As per 2.18 of the FCO/British Council Management Statement, the Corporate Plan shall be prepared in consultation with the FCO and take into account the FCO’s wider international priorities.

As per 2.20 of the Management Statement, the British Council shall seek the prior approval of the FCO for the opening or closure of any Country Directorate.

The British Council has delegated authority to dispose of assets (different threshold for FCR and G-in-Aid); can establish subsidiary companies (subject to FCO sponsor team scrutiny and HMT

endorsement as required under delegations). The British Council does not borrow money.

The Management Statement includes general provisions on British Council information requirements .

144 There should be

a requirement to inform Parliament of the activities of the public body through

publication of an annual report.

An Annual Report is published.

ROLES AND RESPONSIBILTIES