INTRODUCTION

  1.  Under section 2(3) of the National Audit Act 1983, the Public Accounts Commission is required "from time to time [to] present to the House of Commons a report on the exercise of its functions".

  2.  This is our eleventh such report. In it we take the opportunity to give our response to the recommendations of the Sharman report, as they relate to the Commission.

  3.  Lord Sharman of Redlynch was appointed by the Chief Secretary to the Treasury in early 2000 to conduct the Review of Audit and Accountability for Central Government. His report, entitled Holding to Account, was published in February 2001[3].

  4.  In paragraph 5.74 of his report Lord Sharman concluded:

"Consideration of the accountability of the NAO raises the issue of the importance of good communication. Although the NAO produces considerable material about its work, the information available from the Public Accounts Commission—as the body overseeing the NAO—has been relatively limited. According to some departments, this has given rise to a perception that NAO is not subject to as rigorous a set of accountability arrangements as apply to departments".

  5.  And at page 55 Lord Sharman made the following recommendation:

"It is a matter for the House of Commons Public Accounts Commission what information it decides to publish, but in the interests of transparency, and explaining the arrangements by which the NAO is held accountable, there may be scope for more information to be included in its reports. This might include information arising from the VFM reports on the NAO and from the Commission's annual examination of the NAO's own auditors".

  6.  We accept the thrust of Lord Sharman's comments and set out below our proposals for meeting the spirit of his recommendations concerning the role of the Commission.

  Value for Money Studies of the NAO

  7.  In his report, Lord Sharman drew attention to the fact that Value for Money studies on the NAO itself are carried out by the NAO's auditors (whom we as a Commission appoint) and that the resulting reports are presented to us, but not published. There is no reason in principle why VFM studies of the NAO should be treated any differently from such studies carried out by the NAO. We have therefore decided that in future it will be our usual practice to publish VFM studies of the NAO. The Comptroller and Auditor General (C&AG) confirmed at our meeting on 12 March that he saw no difficulty with this approach.

  Information about the work of the Commission

  8.  We also agree with Lord Sharman on the need for the Commission to be more open and transparent about its own activities. The Commission is both a guarantor of the independence of the NAO and the scrutineer of its efficiency and financial requirements. It is therefore proper, for the reasons given by Lord Sharman, that the Commission should publish as much information as possible about the way in which it discharges its functions.

  9.  We therefore propose, unless there are compelling reasons to the contrary (such as security considerations), to publish

—  the minutes of our meetings (beginning with those of 12 March 2002), including the outcome of our annual consideration of the NAO's Estimates and Corporate Plan

—  relevant supporting material, such as the explanatory memorandum submitted by the NAO to accompany its draft Supply Estimate

—  other documents relating to the work of the Commission, such as correspondence between our Chairman and the C&AG.

  10.  We also intend to make it our regular practice in future to hold the twice-yearly scrutiny sessions with the NAO in public.

  11.  We hope that these modest steps in the direction of greater openness will lead to a better public understanding of the role of the Commission in holding the NAO to account for its own stewardship of public funds. We shall continue to examine other ways in which we can bring the Commission's work to a wider audience.