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02.04.14

Audit of private providers ‘vital check’ on public spending – ACCA

The transparency of the private sector in delivering public services is “sub-standard”, according to Gillian Fawcett, global public sector finance chief of the Association of Chartered Certified Accountants (ACCA).

In a new report – ‘Breaking out: public audit’s new role in a post-crash world’ – the ACCA stated that public audit has a “crucial” role to play in both preventing the ongoing waste of taxpayer money and boosting society’s trust and confidence about how governments spend public money.

While emphases differ in the countries represented in the report, there is a shared view that public audit is a vital check on public spending.This is reflected in the report’s foreword by the Margaret Hodge MP, chair of the Public Accounts Committee (PAC), who urges that public audit, and the work of the PAC, needs to provide effective oversight of the way government spends taxpayers’ money.

Hodge says: “Audit has to move forward, to test its efficiency and effectiveness in how money is raised, as well as how is it spent. Implementation of major projects, particularly in IT and defence, is typically disastrous. Both result in the waste of millions, if not billions, of pounds of taxpayers’ money. Yet the PAC encounters the same failures time and time again.

“The role of the civil service has transformed over the last few decades, towards a much greater focus on delivery and away from policy advice and administration. In part, this is a result of the decision by recent governments to contract out more and more of our public services to the private sector.”

Suggestions are made about speaking more directly to the public, about closer liaison not just with parliamentary accounts committees but all those concerned with scrutiny and public service effectiveness.

Fawcett added: “As the boundaries of public audit widens, the role of the public sector will need to expand to play a more crucial role in correcting the way public money is spent and accounted for.

“The private sector is now heavily involved in delivering public services in the UK, but its accountability is sub-standard. If we want to better manage service failure risks and boost public trust then accountability and transparency need strengthening.”

Other recommendations include the need for auditors to intervene earlier in the processes by which money is allocated to departments.

(Image copyright: Labour)

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