Audit row stirs

A row between the Audit Commission and the National Audit Office is brewing over which of the agencies should audit public service agreements between government departments and other bodies.

A panel of academics told the Commons Treasury committee that the government must decide whether an existing audit body should be adapted to handle agreements or whether a separate organisation should be established.

The academics also warned that for performance data to be taken seriously, it would have to be valid and reliable.

The dangers of not having good audit arrangements have been bought to parliament’s attention recently in NAO value-for-money reports such as its investigation into National Savings. NAO auditors slammed the agency for failing to appoint enough qualified accountants.

Backing the Audit Commission for a leading role, Professor Sue Richards of Birmingham University said: ‘Local government, through its audit regime, is subjected to much greater scrutiny than central government is through the National Audit Office.’

But senior NAO insiders said public service agreements could not sensibly be audited without a good working knowledge of government departments – which the Audit Commission does not possess.

‘All or most public service agreements will also be out-put and performance analysis statements, so we should clearly have a role in auditing them,’ the source said.

The agreements have been designed to set strict targets for improving services over three years, while shifting the focus of audit work from inputs to outcomes.

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