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AUDITOR GENERAL (NAO) RESPONDS TO IMPORTANT QUESTIONS

posted 10 Mar 2014, 08:31 by Peter Webb   [ updated 17 Mar 2014, 02:56 ]

Adding that “the comments you have raised are very helpful”

Early shock and disbelief at the state of UK governance compounded by the later explosion of public deficit and debt prompted a line of campaigning centred on management and financial control at the top of government including correspondence with this independent official. The NAO watchword is “Helping the nation spend wisely” with a plan to “increase our influence”.

 

The ultimate systemic flaw: To re-cap: In 2008 there was a published pan-european letter protesting at the 14 year (now 19) Court of Auditors’ inability to pass European accounts. That  suggested  while sitting with the UK signatory Matthew Elliott of the TaxPayers Alliance that our own government might not have produced proper accounts or passed the audit. This was confirmed by the NAO who reported the intention for WGAs (Whole of Government (consolidated) Accounts) and the still missing budget (WGB?).  MEP Ashley Mote’s responding published letter  cut  through  the detailed findings to reach the heart of the matter in one sentence with the “little understood” principle of “shared management” with the recipients of voted funds, and in a second sentence that assurance was unlikely – ever. Put another way this means that governments vote money then walk away leaving undone the feedback loop necessary for financial control and formal accountability. Confirmation of this came from the ICAEW (Chartered Accountants) who see the need for a CFO at the cabinet table. “What the government is proposing (under Financial Management in Government – December 2013)  seems only to cover one aspect of financial management, the public spending side. To be most effective it should cover overall balance sheet management integrated with performance management – both inputs and outputs of the financial equation.” As to management accounting a member of the Efficiency and Reform Board recently said that notwithstanding improvements government’s view of its operations “remains clouded”.

 

It is suggested that Running the country, or anything, can be likened to driving a car: 

Financial control is about knowing as nearly as possible in real time what is happening and acting on it. But Government has  disconnected dashboard instruments and the view through the windscreen hours ago. WGAs which are 50 years late and take 22 months to produce and then are not followed by the intended WGBs (budgets in WGA format) is NOT knowing. The integration and variance analysis of OBR forecasts should also be part of this. If David Cameron and George Osborne, or for that matter Ed Miliband and Ed Balls, have not experienced these things how can they ‘drive’ manderins ?”


 The Comptroller & Auditor General, Anyas Morse, was accordingly asked:

·       Will you now see the wood as well as the departmental trees in striving to “increase your influence” up to  say, the First Lord of the Treasury? A copy of a letter so addressed  WHO WILL MEND UK GOVERNMENT ? of 13th  June 2013 was attached.

·       Have you submitted your ‘heart of the matter’  analysis and recommendation  and if so to whom and with what result ?

·       Where is the reform of governance for the long term ?

·    Is the government of the day responsible for the WHOLE of government and public finances, together with operational performance standards, or isn’t it ? The second part of the question wasn’t answered.

 

His reply, which is attached,  pointed out :

 

·       His responsibility for certifying accounts of government departments and other bodies

·       For ensuring efficiency and effectiveness of the use of their resources

·       That Finance is to be put at the heart of decision-making

·       That the Treasury has said that the debt and deficit level is unsustainable

·       That he will be taking an “end-to-end view” of central and local spending:  balancing local accountability with need for central funding.


Their work  seems to have an exploratory and pragmatic flavour as if with no ‘permanent file’ of best practice against which to set findings. The Prime Minister and cabinet do not seem to fit in or be addressed as  requiring  best quality ‘levers’ for ‘running the country’ operationally in the domestic sphere.

 

“Adapted to government” referring to the new Director General and his cv and brief not being a CFO as in the private sector is questioned. What compromise is this ? It defers to Parliament’s ultimate authority over spending – and  damn the consequences of commitments and debt repayment beyond a parliament. This is rather as if Parliament has  god-like power to over-ride the inexorable rules of monetary arithmatic, and not maintain reserves against tax shortages due to down-turns in the economy . Is there a fear of uncomfortable facts and assessments ? The PAC Chairperson’s  language  seems to regard WGA as some wonderful new thing but the  ‘best practice’ convention is long established.  WGA/OBR system institution and integration should have been called for many decades ago. This unpardonably late evolution explains much and has cost us dear.

 

He does not deal with the  linking of  performance reporting with elections  with all  connections and terminals clearly known and without strays (such as LEPs).  That would combine management systems and democracy in action in a much smaller government. He is referred to Transparency or Accountability ?

 

I finally asked: “Do you expect some shorter time than 19 years after which UK Accounts will get the ‘clean’ certificate from you which is unlikely, ever, in Europe ?”

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Peter Webb,
12 Mar 2014, 04:44
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Peter Webb,
12 Mar 2014, 04:45
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