PAC enforces NAO shake-up

The Public Accounts Commission has greenlighted sweeping changes to the NAO’s
corporate governance in the wake of a no-holds-barred review from the former
head of the FSA.

In their response, the MP did not directly address John Tiner’s
merger
suggestions but said that the chairman of the Audit Commission, currently
Michael O’Higgins, will sit on the board of the NAO ‘to promote co-operation
between NAO and Audit Commission.’

Ministers also limited the Comptroller and Auditor General’s term of office
to ten years with no option for re-election.

The MPs endorsed most of the recommendations for improved governance of the
organisation from former FSA chief John Tiner but lengthened the single term
from the eight years he proposed and added a requirement for the incumbent to
consult the Advisory Committee on Public Appointments on any subsequent
employment.

The commission set up the review, carried out by John Tiner following the
controversy surrounding Sir John Bourn’s expenses.

Under the new rules there will be a statutory NAO Board with a chairman. The
panel will consist of three executive members including current NAO chief Tim
Burr, and four non-executive members including the chairman, and the chairman of
the Audit Commission as an observer (to promote co-operation between NAO and
Audit Commission).

The C&AG would appoint executive members (subject to Board approval); the
Commission would appoint non-executives on a recommendation from the NAO
Chairman,’ the commission added.

The rules concerning auditor appointments have also been revamped. Whereas
currently the Commission appoints the external auditors, drawing on advice from
the NAO, the NAO’s audit committee will now recommend a firm to the board, which
‘if it agreed, would appoint the firm, subject to approval by the commission.’

Further Reading:

Read the
Public Accounts Commission report

Bourn
fallout sparks NAO merger call

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