Shorter, quicker, clearer, earlier: transformation at the UK National Audit Office

This morning I attended a presentation at the European Court of Auditors by guest speaker Amyas Morse, the  UK’s Comptroller and Auditor General, who is effectively an Officer of the House of Commons. As the NAO website states, both he and his staff at the NAO (some 860) are totally independent of government. They are not civil servants and do not report to any Minister: ‘We can be effective only if we retain our ability to comment objectively and independently on what government does, and we cannot therefore act as adviser on the specific decisions the government takes.’

Morse spoke of the ‘transformation journey’ that the NAO has been on in recent years since he took up his 10-year mandate in June 2009. His aim was to raise the effectiveness and profile of the UK’s supreme audit institution. The NAO communicates with the ECA bilaterally and through the Contact Committee, which brings together the 28 SAIs of the EU.

One major change has been the push to introduce much more succint audit reports. They are shorter (maximum 1000 words), quicker (an average of 8-9 months to produce), clearer (with attention to language: don’t say ‘could have been faster’ when you mean ‘very slow’) and with earlier communication about publication dates (instead of allowing departments to stall publication by haggling over modifications, announce in advance the date the report will be published and then invite third parties to engage with the draft report, drawing their attention to points of interest). Morse even spoke of moving to introduce pre-report presentations, so that audit issues can be aired and debated first to help quicker and more efficient drafting.

One trend has been the rise in whistleblowing, with letters passed on to the NAO by MPs or else the public writing directly to the NAO. With an increase in communications, the NAO has sought to organise and structure the way in which it responds, in some cases launching fact-finding investigations, but rather than drawing conclusions, letting the facts speak for themselves. Sometimes the facts themselves are very loud.

He explained the process of change at the NAO with the organisational structure representing a honeycomb, with clusters of auditors working in related fields, such as those auditing large infrastructure projects in transport and energy in one chamber. He observed that auditors are naturally sceptical (a good thing) and usually quite conservative, so people ‘wont’ necessarily be thrilled by change’, meaning you need to be persistent and persuasive.

Morse placed importance on know-how, not just knowledge. You can’t rely on intelligence. He emphasised the importance of building up expertise through structured experience. ‘Being clever is great’, he said, but felt that simply assuming clever people can turn their hand to anything time and again is old-fashioned. ‘Being reasonably clever and knowing what you are doing is even better’.

He concluded by stressing the important of essential tasks: ‘The most important thing we do is financial audit’. As such, the SAIs need be alert and continue to work towards achieving higher quality audit, accepting the reputational risks inherent in the performance of core audit tasks. The NAO itself is itself checked by the Financial Reporting Council (which normally regulates the private sector audit firms), and oversight is carried out by a Parliamentary committee, the Public Accounts Commission, which appoints our external auditors and scrutinises its performance.

‘Don’t underestimate the willingness of NAOs to cooperate with you, please don’t’, he stressed to the ECA, ‘I would reach out’.

By Paul Stephenson

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