Government resists extension of audit watchdog powers

According to Treasury minutes the public sector watchdog does not need a statutory right of access to all non-departmental public bodies whose auditors are currently appointed by, and report to, government ministers.

The Treasury also believes the new government company, Partnerships UK, to be set up to manage the awarding of PFI contracts, should not be audited by the NAO.

The news came in Treasury minutes and will come as a blow to members of the PAC looking to get amendments on the NAO’s powers in the Government Resource and Accounts Bill currently making its way through the House of Lords.

The Bill is intended to bring commercial accounting practices to government departments, but the PAC believes it is an opportunity to go for wholesale reform. Support for the PAC’s amendments is said to be growing among members of the Lords.

The NAO currently audits most non-departmental public bodies, but is restircted from examining the accounts of at least 60 spending more than £3bn a year.

The minutes say: ‘The Tresury accepts that the current arrangements for the audit of executive NDPBs are something of a hotchpotch. It does not accept, however, that the National Audit Office should automatically be appointed the auditor of all such bodies.’

Requests for automatic access to the PFI company Partnerships UK are ignored by the Treasury which claims the NAO could look at papers in relation to the company while auditing the Treasury.

‘PUK will be a risk-taking private sector body. It will have a majority of private sector investors who will seek a return on their investment and will therefore need to act commercially,’ the minutes said.

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