Select Committee on Liaison Third Special Report

Appendix 2: National Audit Office Response

Letter to the Chairman of the Liaison Committee from the Comptroller and Auditor General, 27 June 2008

I thought it might be helpful, following the publication of the Liaison Committee's report, Parliament and Government Finance: Recreating Financial Scrutiny, to set out our position on those conclusions and recommendations that relate to the National Audit Office.

The Alignment Project

The Treasury's Alignment Project seeks to secure consistency between spending plans, estimates and accounts. We agree with the Committee's assessment of the potential significance of the project in improving both financial scrutiny and financial management in departments. We support the aims of the project and are, as the Committee has noted, represented on the project's Steering Committee.

NAO support to select committees other than PAC

We welcome the Committee's support for the assistance we provide to select committees other than PAC and, like the Committee, we are also keen to see this work develop further.

In our memorandum to the Liaison Committee, published with its report on the work of committees in 2007,[1] we set out details of NAO support during the year. The support took a number of forms ranging from the provision of formal evidence for committees, including evidence-gathering and research in response to a committee's requests, to informal oral and written briefings and the secondment of staff with particular expertise in the area covered by a committee. In 2007 the NAO provided support of this kind to 11 Commons select committees.

As part of our programme of work aimed at strengthening financial scrutiny, the NAO produced formal briefings for three committees on the performance of their respective departments in 2006-07. Designed to assist the committees in the examination of their department's expenditure and administration, the briefings were based on material in Departmental Annual Reports and, where appropriate, on issues that had arisen from the NAO's mainstream value for money and wider work, for example on regulation and performance system validation, and the action departments had taken in response. Following positive feedback from the committees concerned, the NAO has allocated further resources to this area to increase the number of performance briefings it produces for departmental select committees in future years.

Publication of NAO Management Letters

The report recommends that departments publish the NAO's management letters, which convey detailed audit findings to those responsible for managing expenditure in Departments. We will discuss this recommendation with the Treasury. We consider that publication would tend to reduce the frankness of the letters, however, while doing little to promote public understanding since their content is at a detailed and technical level.

Training for Members

The Committee notes that one way of increasing Members' capacity for financial scrutiny would be to make more training available for them, and notes that the NAO could provide training for more specialised areas such as the Private Finance Initiative. We would be happy to assist in this respect.

Yours sincerely

Tim Burr

1   Liaison Committee, Third Report of Session 2007-08, The work of committees in 2007, HC 427 Back

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