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Journalism - The Guardian

City diary
Friday November 29, 2002

  • Why is the national audit office so worried about an employment tribunal currently going on in Croydon? It is the talk of the government's auditing arm and those on high have made it plain that no dissent will be tolerated. The NAO has even refused to give us its statements, despite them being read out in court. The problem may be that the case centers on alleged bullying of staff by retired assistant auditor general Jim Marshall. He happens to be a close friend of NAO head Sir John Bourn, who is also due to retire soon. Perhaps the NAO is worried how it may look that Mr Marshall was moved to a new (smaller) unit soon after a formal complaint was made about his behaviour in 1996. Or that he was suddenly retired (early) after a second formal complaint in 2001. What seems more likely, though, is that the NAO is terrified that if it loses the case, there will be calls for it to be made more accountable. Aside from Sir John's embarrassment and the risks of senior staff being forced to resign, there are several big questions the NAO has to answer.

  • One of them is how it manages to produce large audits on complex public bodies so cheaply. The Big Four accountancy firms - which are entitled to some of the business if they prove competitive - would like to know. The NAO really is good value for money, even the public accounts committee - the only people allowed to review it - says so.

  • But then while the PAC is entitled to inquire about NAO managerial processes, it has never asked how come the NAO audit staff spend so much time on non-audit work, even when they are working on a project. Instead, they appear to work only the hours needed to bring the total cost of the audit to below private audit costs. Incredible - and just as well, because otherwise misguided people might argue that millions of pounds was being wasted on maintaining a monopoly on government audit.

  • The world hasn't gone completely bananas yet. Stephen Bottomley's "Father Christmas" trademark is doomed to failure. "It's a gimmick, it wouldn't hold water," a patent office expert told us. Good, just checking.

Link to copy on Guardian


This diary attracted the following letter from the NAO to the editor of The Guardian:

The Editor
The Guardian

29 November 2002

As a responsible employer involved in an ongoing Employment Tribunal with a former member of staff it would be wholly inappropriate for the National Audit Office to comment publicly on a case. Kieren McCarthy's City Diary piece (29 November) does nothing to aid the legal process.

His suggestion that the NAO is not fully accountable ignores the fact that we are subject to independent external audit like any other public body. Our auditors are a private sector firm appointed by Parliament. The results of their work are reported to Parliament and we are held to account for the value for money we provide. The process is rigorous and transparent, as even a cursory amount of research would have revealed.

Gabrielle Cohen
Director of Communications


You will note that this letter fails to answer or shed any light on any of the questions raised in the diary.





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