NAO crisis reopens Saudi arms questions

MPs will renew their push to get the National Audit Office to issue its report on the Al-Yamamah arms deal, as the fallout from Sir John Bourn’s departure from the body threatens to spill over into the most sensitive areas of political life.

Sir John resigned as auditor and comptroller general last Thursday, ostensibly because of a conflict of interest with his work at the Financial Reporting Council. But it is widely believed that he left in response to damaging revelations over his expenses.

In a week in which the NAO faced its biggest crisis for many years, MPs called for the Al-Yamamah report to be released. It also emerged that Sir John went as MPs prepared to grill the long-standing NAO chief, while Accountancy Age can also reveal new concerns about the body’s own accounting.

NAO has refused to publish its report into the Al-Yamamah arms deal with Saudi Arabia. The deal has been dogged by suggestions of improper slush funds, denied by the parties concerned.

The NAO recently admitted that Sir John was entertained by BAE Systems ­ the contractor at the centre of the huge deal ­ at the British Grand Prix this year, raising potential conflicts.

‘We will be looking to bring the deal back on to the agenda, as a result of Sir John Bourn’s departure and his conflict of interest issues,’ Liberal Democrat MP John Pugh said.

The issue may be difficult to reopen, he added, requiring a resolution of parliament.
MPs had been gearing up for a closed session with Sir John before the public accounts committee on Monday this week to answer whether or not his expense claims had undermined its work, after Pugh had put the issue on the body’s private agenda. Sir John resigned before the meeting could go ahead.

Accountancy Age can also reveal that the NAO is facing new questions over its own accounting. The body did not make a provision in its accounts for a major office relocation in 2006, despite having costed the move, Accountancy Age has established.

In 2005, the body decided to close its Blackpool office and expand its offices in Newcastle.

Accountancy Age has seen papers showing that the NAO budgeted for a cost of more than £900,000 relating to the move in March 2006. But no mention was made of the costs in the accounts that emerged several months later, to the end of March last year.

The NAO said it had no ‘present obligation’ in relation to the relocation and therefore no need to make a provision in the 2005-06 accounts. The body said some provision had been made in the 2006-07 accounts for staff taking redundancy.