National Audit Office Supply Estimate 2004-05 (HC 384-i) Public Accounts Committee 23 Feb 2004

Oral Evidence given by Sir John Bourn KCB, Comptroller and Auditor General, and Mr Michael Whitehouse, Assistant Auditor General, National Audit Office.

Q9 Mr. Gerry Steinberg (City of Durham): Now, Sir John, I was interested that you are going to support select committees more and you are going to respond to requests for advice and support from members of the public and citizens. The one criticism I would have of the National Audit Office, and it is not a major criticism by any stretch of the imagination, is if I ask for some information it always comes and it is great but it takes a long time to come and very often the problem has passed and even solved itself in some cases. What worries me a little bit is if you take more of this sort of work on it will take even longer. Can you give us a guarantee that this will not happen?

Sir John Bourn: Certainly I will do my best to make sure it does not happen. Sometimes it takes a long time because we have to validate the information from the department because I do not want to give it to you and you might use it to a constituent or the media and then have it denied by the department. I am anxious to get it right. We will seek to do better in that. I think one of the reasons for having the extra expenditure which I propose on that subject would be to deploy more people on it and hopefully get things to you faster.

Q10 Mr. Gerry Steinberg (City of Durham): It is only a minor irritation but sometimes you do wait a little bit too long and by the time you have waited you have either done something else to solve it or answered their question or whatever. It is not really a major problem. Just to change the subject totally, going on to post-Sharman. Clearly you have been given an extension in duties or an extension in your rights of access and you now go to contractors, you go to grant recipients, you can go to housing associations, presumably you can go to student loan companies and people like that now. How has that improved the scope or quality of financial audit that you actually do? Has it had any effect whatsoever?

Sir John Bourn: I hope so far as the quality of the financial audit is concerned it achieves and maintains a high standard. The extra staff that I am recruiting and the extra use I am making of private sector firms is in order to do work of high quality and not skimp. I am confident that we shall be able to do the extra financial ----

Q11 Mr. Gerry Steinberg (City of Durham): That brings me to the next question. What benefits have you actually got from sub-contracting? Have you got any benefits from that at all? Presumably you have from the way you answered that last question.

Sir John Bourn: The decision of the Public Accounts Committee and of the Public Accounts Commission was that I should move to putting out 25% of the work, so in a way that was a policy decision for me to follow. I am confident that I have got good contractors. Again, it is a competitive market, I do not have to take anybody's bid if I do not think ----

Q12 Mr. Gerry Steinberg (City of Durham): Has it saved money?

Sir John Bourn: I do not think you could say it has saved money. One of the reasons it has not really saved money is because the audit has become more complicated as you have moved into having resource accounts. When government departments had cash accounts, cash in, cash out, that was a much simpler one than when you have accrual accounts, each of them with their five statements. As we have audited more complicated accounts it is certainly costing us some extra money to do it but that is what you would expect, it is a different task.

Q13 Mr. Gerry Steinberg (City of Durham): Do you have a double-check? Presumably if you do it costs more.

Sir John Bourn: It is not exactly a double-check but it is a check on the quality of the work done, as I say, by the usual system of internal check which all auditors do and also by having us bring into the office the work of the Joint Monitoring Unit. I am confident that I have a way of checking up that the financial audit is done to the right standards.

Q14 Mr. Gerry Steinberg (City of Durham): So the $64,000 question is do you think you should sub-contract more, perhaps 35%, 33%, 50%?

Sir John Bourn: Next year I will get to 22% and that still gives me 3% to go.

Q15 Mr. Gerry Steinberg (City of Durham): You could be sub-contracting yourself out of a job.

Sir John Bourn: I think that 25% is a reasonable figure. There are advantages in having a core and cadre of people who do specialise in central government departments. I would not want to go to the stage of having most of the work contracted out, I think it is right to have that and also to have people who understand how Parliament works and how the Committee works.

Mr. Gerry Steinberg (City of Durham): Personally I would have thought that has gone far enough. Thank you.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.