NAO issues MP expenses clampdown warning

The National Audit Office has warned that moves to have MPs’ expenses subjected to a forensic audit may prove to be a potential minefield. The opinion was revealed as the parliamentary body in charge of monitoring expenses confirmed it would put the work out to accountancy firms for tender.

The NAO said that the measures, proposed to keep a closer eye on MPs’ spending habits, would be a ‘substantial, intrusive and costly exercise’ in some respects.

The proposals are set to be thrashed out today at Westminster as the issue goes to a key vote in the House of Commons, with MPs and watchdogs appearing to be at odds.

Under the members estimate committee plan, MPs would have their receipts put under the spotlight by auditors. While the NAO supported the move in principal, the watchdog has drawn the line at some of the reforms.

It said: ‘In order to provide the required level of assurance, it is likely that the programme of member assurance visits would be a substantial, intrusive and costly exercise. (Several times the cost of the audit of the financial statements.)’

MPs on the members estimate committee have recently been in meetings with firms, the NAO, HM Revenue & Customs and a consultant formerly with the ICAEW, in efforts to carve out a new MP expenses framework.

The estimates committee backed a version of the practice assurance model used by the ICAEW to make sure that firms pass muster. This would involve regular financial health checks on records and processes used in MPs’ offices by ‘outside professional teams’ covering 25% of members each year, and all members by the end of each Parliament.

This would cost between £150,000 and £500,000 a year, the estimates committee said.