Bourn fallout sparks NAO merger call

NAO office

A radical shake-up of government auditing could see the National Audit Office
and Audit Commission merge, after a review of the NAO by former Financial
Services Authority chief John Tiner.

In an uncompromising review of the governance of the NAO, whose reputation
was severely damaged by revelations surrounding the former comptroller and
auditor general Sir John Bourn, Tiner made the suggestion that the two bodies
should be joined in the near future. The only immediate barrier to such a merger
was the urgent need for the NAO to get its house in order first, he said.

‘It seems to me that pursuing a merger now would slow down the governance
reforms necessary at the NAO,’ said Tiner in a Public Accounts Commission review
of the NAO’s corporate governance.

He issued a coded criticism of Sir John Bourn’s troubles as he cited an
‘overwhelming case for strengthening NAO governance’ in proposing an overhaul of
the management structure.

‘In the exercise of his responsibilities the C&AG must, in my view, rely
not only on the powers given to him by Parliament, but also on the moral
authority which comes from the NAO maintaining the highest standards of
governance,’ he said.

The merger may prove the most eye-catching consequence of the review. The
Audit Commission mainly covers local authority work, but there is increasing
crossover. ‘It would be better to put the structure of the NAO on a firmer
footing [first],’ said Tiner.

Under his recommendations, processes would be tightened by having a board of
independent directors alongside the NAO chief. The comptroller and auditor
general would also be constrained to an eight-year term.

The NAO declined to comment on the review. Audit Commission chief Steve
Bundred said the review was ‘balanced’. Tiner’s view that the merger issue was
kept open for future review was ‘sensible,’ he added.

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