The Revenue & Customs Prosecution Office is a new body, so you might have thought that comptroller and auditor general Sir John Bourn would have given it a bit of leeway when he tackled its first set of resource accounts to parliament. Not a bit of it.

Sir John raised the employment of COO Dave Partridge’s wife, saying his staff thought it ‘novel and contentious,’ and he laid into the department’s poor accounting procedures for paying lawyers.

What's happening?

The RCPO was created in the wake of the London City Bond case and the fallout from them. Previously, Customs & Excise prosecutors had been part of the department.

But after the City Bond case, where the lines between informers and participants in a major alcohol duties fraud had been blurred, Lord Butterfield recommended an independent judicial body.

Set up in 2005, the body’s first accounts have been shot down in spectacular style by Sir John. Not only did he raise the payment of £27,000 to the wife of the chief operating officer, Dave Partridge, for work as an HR consultant. He also qualified the accounts for the unconvincing accounting for lawyers’ fees.

The department was still receiving invoices for work done in 2004, making it difficult to ascertain whether the 2005/06 numbers were good approximations, and there was also no prior agreement on how much counsel was going to be paid for particular cases.

What's going to happen?

The department’s head honchos have a date before the Public Accounts Committee, the body that scrutinises government accounts, and can expect a rough ride from the committee, which is chaired by Edward Leigh MP, no shrinking violet.

The committee, meeting on May 2, will want to ask about the payment to Partridge’s wife and, perhaps, probe the comings and goings between the NAO and the Treasury. Sir John Bourn’s staff queried the payment, saying it should have gone through the Treasury. The chancellor’s department did subsequently approve the payment.

The department is doing something to sort out its problems. It has established an internal audit function; improved month-end processes; and has a new system for processing lawyers’ fees which Sir John said ‘should improve the department’s ability to manage this key element of its expenditure.’

‘It’s a fair cop, but we’re sorting it out’ is bound to be the line; whether or not that works when you’re on the receiving end of a tax fraud investigation is another thing entirely.