3 Background to the review
10. In its Thirteenth Report published on 11 July
2007, the Public Accounts Commission introduced a new system of
independent oversight in respect of the expenses of the C&AG.
It was emphasised in that report that as far as expenses are concerned
the C&AG should follow the rules and practices of Permanent
Secretaries. The Chairman of the NAO's Audit Committee, assisted
by the Office's Director of Internal Assurance, would oversee
the planned expenses of the C&AG and have access to the Public
Accounts Commission in the event that he or she has any concerns.
In addition, the actual expenses of the C&AG would be reported
to the Public Accounts Commission six-monthly and be subject to
independent audit. These new procedures were designed so as not
to fetter the discretion of the C&AG in the discharge of his
functions.
11. The Thirteenth Report also stated that the Commission
would be reviewing the corporate governance arrangements of the
NAO to ensure they conform to best practice. I was appointed by
the Public Accounts Commission to conduct this review on its behalf
and this report sets out my findings and proposals for strengthening
the governance of the Office. As agreed with the Commission, I
have reviewed the governance arrangements in general and have
neither specifically reviewed or assessed the expenses of the
C&AG or the operation of the new oversight procedures referred
to above.
12. The terms of reference for the review were set
out in a press notice by the Commission on 11 October 2007, as
follows:
"To identify the extent to which the NAO's corporate
governance arrangements are consistent with best practice elsewhere
(including the arrangements set out in the Combined Code on
Corporate Governance and the Treasury's Corporate Governance
in Central Government Departments: Code of Practice) and to
propose any necessary improvements, taking account of the need
to protect the Comptroller & Auditor General's statutory discretion
in carrying out his duties.
"The review should focus on the role of the
C & AG and his relationship with the NAO, and should cover
the role of the NAO's Senior Management Board, whether a separate
advisory board would be beneficial, the number of non-executives
and the method of their appointment, the method of appointment
and reporting arrangements of the Audit Committee, the method
of appointment of senior NAO officials, arrangements for determining
remuneration, and internal controls, together with any other matters
the reviewer or the Commission consider appropriate."
| 
