TERMS AND CONDITIONS FOR THE C&AG
Term limit
15. We agree with John Tiner that the C&AG should
be appointed for a single non-renewable term. We consider it
essential that the term is long enough for a C&AG to establish
himself or herself and gain experience. John Tiner has proposed
an eight-year term. We prefer a slightly longer term, of ten
years.
Appointment process
16. We agree with John Tiner that the appointment
of the C&AG should continue to be by a process which involves
agreement between the Prime Minister and the Chairman of the Committee
of Public Accounts (as provided for in the National Audit Act
1983), and also that the principles set out in the Code of Practice
published by the Office of the Commissioner for Public Appointments
should be followed.
Salary
17. We agree that linking the C&AG's salary to
that of a High Court judge does not link the position to an appropriate
peer group. We believe the salary should instead be comparable
to that of the Treasury's Permanent Secretary and be linked to
that pay level, but adjusted to reflect the bonuses available
to the Treasury's Permanent Secretary rather than creating a bonus
system for the C&AG. In the longer term we would like the
salary to be reviewed in time for the term of the C&AG after
next, with particular reference to the possibility of varying
the salary in order to be sure of attracting the best candidate.
Subsequent employment
18. A single non-renewable term in place of the present
unlimited tenure implies that a future C&AG might undertake
a different employment after his or her term. It is obviously
essential that subsequent employment could not be seen as a reward
for actions taken while C&AG, and for that reason there should
be a lifetime prohibition on a C&AG or former C&AG accepting
any post in any body which the NAO has audited or which is in
the gift of the Government. Apparent conflict of interest could
also arise over some other posts in the private sector, for example
with defence contractors or other suppliers to the public sector,
and a C&G should be required under the terms of his or her
contract to consult the Advisory Committee on Public Appointments
(currently chaired by Lord Mayhew) before accepting any employment
whatever after leaving the post of C&AG and to abide by the
decisions of that Committee.
The C&AG's responsibility
19. We note that the C&AG's overall responsibility
for audit judgments does not imply that all such judgments must
be made by the C&AG. It is therefore possible for the C&AG
to delegate the making of audit judgments to subordinates.
EXTERNAL AUDITORS
20. We agree with the proposals in the review relating
to the NAO's external auditors, subject to retaining the requirement
that the Commission approve the auditors' appointment. Whereas
currently the Commission appoints the external auditors, drawing
on advice from the NAO, the new system would be as follows: the
NAO's Audit Committee would recommend a firm to the Board, which,
if it agreed, would appoint the firm, subject to approval by the
Commission.
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