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GOVERNMENT AUDITING METHODS TO BE REVIEWED

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Andrew Smith, the chief secretary to the treasury, has proposed a review of the way government is audited for the m...
Andrew Smith, the chief secretary to the treasury, has proposed a review of the way government is audited for the money it spends, reports The Financial Times (p4).

Parliament, whose job it is to hold the executive to account, is being asked to help set up the review, which is intended to examine the audit arrangements that date from Gladstone's day.

These have been increasingly called into question in the wake of devolution, European directives on audit, the government's development of public-private partnerships and the issue of how far private finance initiative projects should count on the government's balance sheet.

The study is bound to raise the suggestion of whether the National Audit Office, which covers central government, should be merged with the Audit Commission, which covers local government.

The NAO's relationship to the range of new audit bodies that Labour has created in housing, health, benefit fraud, youth justice, training and elsewhere will also be examined.

Mr Smith said: 'This is a great opportunity for parliament and government to work together to make sure transparency and accountability go hand in hand with the modernising government agenda.'

Press release from the treasury follows.

REVIEW OF CENTRAL GOVERNMENT AUDIT ARRANGEMENTS ANNOUNCED

An historic opportunity to look more widely at the whole question of

audit, access and performance validation across central government

was signalled yesterday by the chief secretary Andrew Smith as he

proposed that a study be set up to recommend suitable audit and

accountability arrangements for central government in the 21st

century.

He commented:

'This is a great opportunity for parliament and government to work

together to make sure transparency and accountability go hand in

hand with the modernising government agenda.'

In answer to a written parliamentary question he said that the proposed review will cover the modernising government agenda, audit/validation of performance measures, the implications of devolution, the wider European context, with particular reference to European Directives affecting audit arrangements, possible models from other countries and the relationship with other audit and regulatory bodies.

Mr Smith stressed that he was keenly aware of the importance of

parliament's rights in these matters. He recognised the need for its

interest in scrutiny, accountability and control of expenditure to be

reflected in the way the review was undertaken, including the

steering group for the study. The steering group will direct a

project board responsible for the delivery of the study and the

project board will have an independent chair.

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