PracticeAuditAudit contracts, not costume dramas

Audit contracts, not costume dramas

Should the National Audit Office be allowed to comment on the BBC's fondness for producing home makeover programmes? And would it matter if it did?

It might sound trite but that is the argument at the heart of whether government auditors should be allowed in to pore over Auntie’s accounts.

No one disputes the fact that government money needs to be audited. Most people agree that the NAO does a pretty good job in policing Whitehall spending in terms of both probity and value for money. And there is broad agreement that its auditors should follow public money wherever it is spent.

So why does the idea of granting the NAO access send the BBC apoplectic?

The argument supporting NAO access is simple: the licence fee is effectively a tax on watching TV, so the NAO, which audits Whitehall and produces value for money reports on various government projects, should be looking at the BBC’s books.

Against is the fact that the BBC says it is already properly audited.

It has KPMG as its auditor, with PKF reviewing its annual report and accounts.

Contracted to provide a ‘fair trade’ audit to ensure the BBC is not acting uncompetitively is PricewaterhouseCoopers.

But the real problem the BBC has is that it believes the NAO – as a very differing auditing beast, it is interested in value for money as much as it is interested in good governance – would interfere with its creativity.

That argument simply does not stand up. To draw a parallel, the spending watchdog reviews government benefits payments every year.

The audit office has plenty to say about the systems designed to ensure that those benefits go to those who are entitled to them but it doesn’t comment on the appropriateness of the benefits themselves. That is, and should be, a political decision, not an auditing one.

That said, it is vital that if the NAO is given access to the BBC, strict terms of agreement are drawn up over what exactly the NAO is there for.

It will want to look at ‘value’ within the BBC but it should not be allowed a free rein. It should concentrate on business operations and attempt to identify areas where the BBC, given its enormous spending power, could improve value for money. So contracts, yes. Costume dramas, no.

And if the BBC wants to make more home makeover programmes that’s the BBC’s business, not the NAO’s.

Email your views to comment@accountancyage.com.

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