On the fourth day of the debate on the former Principal Auditor’s 2018/2019 Report, the Chief Minister focused on what he described as the clearest example of the Report’s failings: the recommendation that Gibraltar should establish a Public Accounts Committee (PAC). He told Parliament that this section of the Report was “incendiary, partisan, and wholly beyond the Auditor’s remit.”

Auditor Strayed into Policy

The Government reminded Parliament that an Auditor’s role is to scrutinise administration and ensure that spending is lawful and properly accounted for. It is not to comment on or prescribe government policy. The Chief Minister drew on case law to show that this principle has been long established:
• In R v Roberts [1908], the courts confirmed that auditors may question administrative actions but not policy.
• In Roberts v Hopwood [1925], it was reaffirmed that auditors must ensure spending is lawful but cannot interfere in policy decisions.
• This principle is codified in section 6(2) of the UK National Audit Act 1983, which expressly prevents auditors from questioning “the merits of policy objectives.”

The Chief Minister said this distinction was clear: an auditor may examine whether wages are paid lawfully, but not whether a works committee should exist at all. By recommending a PAC, the Principal Auditor had strayed directly into policy-making, which is reserved for Government, Parliament, and ultimately the electorate.

Biased and Partisan Recommendation

The Government argued that the Auditor’s call for a PAC was indistinguishable from the Opposition’s manifesto commitment. The Report even used almost identical wording to the GSD’s stated policy. By contrast, the governing GSLP-Liberal parties had been elected four times on a clear commitment that Gibraltar did not need a PAC.

The Chief Minister described this as “a recommendation that sides with one political party against another in a hotly contested debate. That is not impartial auditing – that is policy advocacy dressed up as audit.” He added that this represented a dangerous blurring of lines, undermining the impartiality of a constitutional office which should always be above politics.

Ignoring Parliament’s Debate and Decision

The Chief Minister also pointed out that the Report completely ignored a major parliamentary debate on the PAC issue, held on 26 February 2024. That debate, prompted by an Opposition motion, lasted eight hours and concluded with a Government amendment that reaffirmed its manifesto commitment not to establish a PAC.

The Chief Minister described it as “remarkable and disrespectful” that the Auditor’s Report, published more than a year later, failed even to mention this debate and decision of the House.

The Report also disregarded the Commission on Democratic and Parliamentary Reform, chaired by Adolfo Canepa, which had already considered the PAC question and concluded that such a committee was unnecessary and unsuitable for Gibraltar’s parliamentary system. The Chief Minister said the Auditor had dismissed this conclusion “without justification, and in defiance of parliamentary authority.”

Legal Assessment

The Government underlined that constitutional independence protects an Auditor’s freedom to examine accounts without interference, but it does not give any authority to propose parliamentary reforms. Independent advice from Mr Fisher KC supported the Government’s position, concluding that:
• The Auditor’s recommendation for a PAC was ultra vires and outside the lawful scope of the office.
• By aligning itself almost word-for-word with the Opposition’s manifesto, the Report created the appearance of political partisanship.
• This undermined the neutrality of the Office of the Principal Auditor and breached the standards of impartiality required by law and by professional auditing codes.
Mr Fisher KC warned that where an independent officer exceeds their remit and advocates partisan policies, public trust in the institution is compromised.

Threat to Institutional Neutrality

The Chief Minister said the inclusion of this recommendation not only undermined the Report’s credibility, but risked damaging public confidence in the Office of the Principal Auditor itself.

He said: “The moment a constitutional office is seen as politically biased, its credibility is destroyed for half the electorate. That is intolerable in a democracy. An auditor must not only be impartial – he must be seen to be impartial. This Report fails both tests.”

Citing the Porter v Magill test for bias, the Government argued that a fair-minded and informed observer would inevitably conclude there was a real possibility of bias in the Report’s insistence on a PAC, given its timing, language, and political context.

Conclusion

The Government described this part of the Report as “incendiary, partisan, and unlawful.” It said the former Principal Auditor had ignored Parliament’s own debate, disregarded independent commissions, and aligned himself with Opposition policy.

The Chief Minister announced that the Government would propose an amendment to the motion before the House to formally reject the section of the Report relating to the Public Accounts Committee. He said legislative reform would now be necessary to ensure Gibraltar’s law mirrors the UK in expressly preventing auditors from commenting on policy. “We will not allow errors, excesses of jurisdiction, and partisan bias to stand uncorrected,” the Chief Minister told Parliament. “Our duty is to protect the integrity of institutions and the fairness of our democracy.”