Imagine, if you will, a guardian watching over the nation’s purse. This guardian is the National Audit Office. It stands as a bulwark of financial accountability.
The National Audit Office is the UK’s independent public spending watchdog. It supports Parliament. It holds the government to account. The National Audit Office helps improve public services via audits. These audits are of high quality.
The story of the National Audit Office stretches back centuries. Its roots lie deep in the history of British governance. The earliest mention of a public official auditing government expenditure dates back to 1314. This mentions the Auditor of the Exchequer.
Queen Elizabeth I established the Auditors of the Imprest in 1559. They had formal responsibility for auditing Exchequer payments. This system lapsed gradually. Commissioners for Auditing the Public Accounts were appointed by statute in 1780.
William Ewart Gladstone championed reform in the 1860s. He was Chancellor of the Exchequer. Gladstone initiated major reforms of public finance. He improved Parliamentary accountability. The 1866 Exchequer and Audit Departments Act required departments to produce annual accounts. These were known as appropriation accounts. The Act established the position of Comptroller and Auditor General. It also created an Exchequer and Audit Department.
The 1866 Act established a cycle of accountability for public funds. The House of Commons authorizes expenditure. The Comptroller and Auditor General controls the issue of funds. Departments produce accounts. The Comptroller and Auditor General audits these accounts. A dedicated parliamentary committee considers the results of these investigations. This is the Committee of Public Accounts. Gladstone established it in 1861.
Initially, the C&AG examined every transaction. The 1921 legislation allowed the C&AG to rely on departmental systems. They examined a sample of transactions. This Act also required the C&AG to report to Parliament. The report confirmed that money had been spent according to Parliament’s wishes.
The National Audit Act 1983 brought further changes. The C&AG became an Officer of the House of Commons. They were given the power to report to Parliament. This would happen at their own discretion. The reports would focus on the economy, efficiency, and effectiveness. Government bodies had to use public funds wisely. The Act also established the National Audit Office. It replaced the Exchequer and Audit Department.
The Government Resources and Accounts Act 2000 introduced resource-based accounting and budgeting. This applied to Department Accounts. The accounts were previously prepared on a cash basis. The Act also provided for the preparation and audit of consolidated accounts. These covered the whole public sector.
The Budget Responsibility and National Audit Act established the NAO as a corporate body. It is led by a Board. The C&AG remains an independent Officer of the House of Commons. Their term is fixed at ten years.
The Local Audit and Accountability Act 2014 provided for the abolition of the Audit Commission. It introduced new arrangements for auditing local public bodies. The C&AG took on the role of preparing the Code of Audit Practice. This sets out what local auditors must do.
Today, the National Audit Office continues to evolve. It adapts to the changing landscape of government. The National Audit Office is based in London and Newcastle. It has a staff of 800. The London office includes a listed building. It was originally built for Imperial Airways.
The National Audit Office is structured into Directorates. Each has responsibility for a government department. Within Directorates, staff are split between Financial Audit and Value for Money work.
The NAO’s work has a positive financial impact. It achieves this through reduced costs. It helps improve service delivery. Its work benefits citizens.
The National Audit Office: a story of accountability. The National Audit Office helps ensure that public money is spent wisely. It has been doing so for centuries.