Transparency of private sector in delivering public services is ‘sub-standard’, says ACCA’s global public sector finance chief

Public audit has a crucial role to play in both preventing ongoing waste of taxpayer money and boosting society’s trust and confidence about how governments spend public money, say the world’s audit chiefs in a new ACCA (the Association of Chartered Certified Accountants) report – Breaking out: public audit’s new role in a post-crash world.

The report gathers views from public auditor generals, academics and policy advisers from Bhutan to Scotland. They offer reflections about the role of public audit in delivering accountability and improving public services, especially at a time when the private sector is increasingly involved in providing public services.

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 Rt Hon Margaret Hodge MP, Chair of the influential UK Public Accounts Committee, who urges that public audit, and the work of the UK’s Public Accounts Committee, needs to provide effective oversight of the way government spends taxpayers’ money.

Ms 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 Public Accounts Committee 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.”

Gillian Fawcett, head of public sector at ACCA, says:

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.

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Auditors must intervene earlier in the processes by which money is allocated to departments. A strong argument has been made that it is only by doing this that problems can be nipped in the bud. Providing assurance in the early stage of a project can limit the administrative failures, preventing them from spiralling into significant value for money failures.”

The collection of essays offer an upbeat reflection of auditor’s role in accountability and improving public service from Australia to Jamaica, Scotland and Bhutan. The writers also speak about improving public engagement and strengthening scrutiny and public service effectiveness.

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.

Ms Fawcett says: “They say there is a need for public audit to improve public engagement, strengthen scrutiny and public service effectiveness. Auditors must penetrate beyond. 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.”

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