A reform too far

Significant changes in the way the National Audit Office operates are now planned, following proposals by the Public Accounts Commission. The main elements of the proposed legislation are that the NAO would be established as a corporate body, with a chair and a board with a non-executive majority. The employee' members of the board would be appointed by the non-executives, not by the corporate body and its head (the C&AG). This insertion of the NAO board between the Public Accounts Commission and the C&AG creates dangers. Governments might use the chair and board as a means of curtailing the activities of the comptroller. Also, the attention of the C&AG and NAO top management will be diverted away from managing the business towards managing the relationship with the board. Problems stemming from excessive independence of the C&AG are preferable to those stemming from subservience to the Executive, whether directly through ministers or through the conduit of an NAO chair and non-executive director majority. The worst outcome would be a weakening of the C&AG and of the NAO itself, arising from a hidden transfer of power out of the NAO towards the Executive. A modest reform, combining a term limit for the C&AG with Audit Committee surveillance of matters such as expenses, hospitality and external activities, would be more proportional to the actual problem and would sustain the tradition of C&AG independence.