Audit Commission To Be Scrapped

[RentingForever]

Breaking news....

Audit Commission to be scrapped

The Audit Commission public spending watchdog, which employs 2,000 people, is to be scrapped, the BBC has learned.

The commission audits £200bn spent by 11,000 bodies in local government to check public money is being spent properly.

A source told the BBC that the announcement, planned for Saturday, was "completely out of the blue".

Staff received an email from management on Friday.

http://www.bbc.co.uk/news/uk-politics-10970008

[piece of paper]

Breaking news....

Audit Commission to be scrapped

The Audit Commission public spending watchdog, which employs 2,000 people, is to be scrapped, the BBC has learned.

The commission audits £200bn spent by 11,000 bodies in local government to check public money is being spent properly.

A source told the BBC that the announcement, planned for Saturday, was "completely out of the blue".

Staff received an email from management on Friday.

http://www.bbc.co.uk/news/uk-politics-10970008

OP's qustion " Who's going to check the books?"

History (subject to shredders)

p-o-p

[Mega]

And that was that.............Welcome to the Banna repulic de La Britan-ia !

Mike

[SarahBell]

No money to be spent = no one needed to check it... Simples!

[Ash4781]

Is it Pickles again?

edit: Presumably bits are teasers from his department for the spending review due in Oct

Edited August 13, 2010 by Ash4781

[hilltop]

"I want to see the commission's auditing function become independent of Government, competing for future audit business from the public and private sector.

"These proposed changes go hand in hand with plans to create an army of armchair auditors - local people able to hold local bodies to account for the way their tax pounds are spent and what that money is delivering."

This is Pickles' justification.

In other words, he has pushed the business into the private sector for jobs in India.

There is also this unproven theory that the general public will beb able to unpick accounts to find waste and misappropriation.

I have tried in the past to take a public body to task about an element of its spending. I was ignored by the external auditors.

It is too easy for public bodies to label expenditure in a misleading way or bury it in 'operating expenses. The effect of the public looking at accounts will be that some bones will be thrown out to attract debate, probably to put pressure on the staff.

The real issues will be buried.

[LuckyOne]

OP's qustion " Who's going to check the books?"

History (subject to shredders)

p-o-p

Or PwC, E&Y, KPMG, Grant Thornton, Moore Stevens etc

[Guest Noodle]

Or PwC, E&Y, KPMG, Grant Thornton, Moore Stevens etc

Imagine the fees.

[Shunnyonions]

Or PwC, E&Y, KPMG, Grant Thornton, Moore Stevens etc

Ah yes, the same mob who make up or influence the ridiculous company accounting standards, and the same mob who have signed off on those banks balance sheets over the last decade.

[Gone baby gone]

Or PwC, E&Y, KPMG, Grant Thornton, Moore Stevens etc

Or, wait for it....

http://www.nao.org.uk

Yes, we already have a branch of government that does auditing, so how about taking on a few staff from the now defunct Audit Commission and employing private sector auditors when required.

[The Masked Tulip]

I wonder how much money - in time/wages/etc - is spent each year by public sector organisations worrying, planning for and getting ready for the auditors.

Used to be a time when each Council had an accountant and some assistants who would check the books. Over the years it has mutuated into a vast industry itself.

[scottbeard]

And that was that.............Welcome to the Banna repulic de La Britan-ia !

Mike

I've never quite understood the Audit Commission anyway - if you don't trust the State, why would you trust the State-run Audit Commission, and if you DO trust the State why do you need it?

[LuckyOne]

Ah yes, the same mob who make up or influence the ridiculous company accounting standards, and the same mob who have signed off on those banks balance sheets over the last decade.

In the end no amount of auditing (internal or external) change chage the culture of the reporting institutions.

From what I can remember, the government has reported debt of about 1 tn while external opinions would set the total liabilities at about 4 tn.

The banks' balance sheets were reasonably accurately reported. The problems of a lack of capital and too much leverage without enough assured liquidity were down to the regulators to expose and correct rather than the accountants.

[LuckyOne]

"I want to see the commission's auditing function become independent of Government, competing for future audit business from the public and private sector.

"These proposed changes go hand in hand with plans to create an army of armchair auditors - local people able to hold local bodies to account for the way their tax pounds are spent and what that money is delivering."

This is Pickles' justification.

In other words, he has pushed the business into the private sector for jobs in India.

There is also this unproven theory that the general public will beb able to unpick accounts to find waste and misappropriation.

I have tried in the past to take a public body to task about an element of its spending. I was ignored by the external auditors.

It is too easy for public bodies to label expenditure in a misleading way or bury it in 'operating expenses. The effect of the public looking at accounts will be that some bones will be thrown out to attract debate, probably to put pressure on the staff.

The real issues will be buried.

The real issue is that many governments of all persuasions at at all levels have lost sight of the fact that every penny of government spending has to eventually be generated from a productive activity, either concurrently or in the future.

Many governments seem to think that spending actually comes from some sort of magic tree and it really doesn't matter how much they spend.

[The Masked Tulip]

I was pretty disgusted to see that the Dept of Justice had a twitter site when its job cuts were announced last week.... Guess what - audit commission has one also:

http://twitter.com/ACgov

[Mal Volio]

The real issue is that many governments of all persuasions at at all levels have lost sight of the fact that every penny of government spending has to eventually be generated from a productive activity, either concurrently or in the future.

You need to think about this by drawing boxes; boxes around the input and output. For a private sector company the money going into the box comes from ordinary people and organisations who by its products, and the money going out (wages, profits) goes to employees and shareholders

For the public sector it's exactly the same, minus the shareholders. The difference is that the income is via tax given in exchange for whatever that organisation does rather than people individually buying stuff. So choice comes in to it, but that doesn't affect the economics. It's the same people - all of us - who pay for both public and private sectors.

[LuckyOne]

Arthur Andersen not around any more?

No.

They helped Enron lie by a smaller order of magnitude than our government about off balance sheet liabilities. Rightly so, their firm went bankrupt and people went to jail.

It would be nice to see the perpetrators of our government's off balance sheet shenanigans suffer the same fate, especially as the non-consolidation rules were tightened up massively after the Enron sham.

[LuckyOne]

You need to think about this by drawing boxes; boxes around the input and output. For a private sector company the money going into the box comes from ordinary people and organisations who by its products, and the money going out (wages, profits) goes to employees and shareholders

For the public sector it's exactly the same, minus the shareholders. The difference is that the income is via tax given in exchange for whatever that organisation does rather than people individually buying stuff. So choice comes in to it, but that doesn't affect the economics. It's the same people - all of us - who pay for both public and private sectors.

In the private sector, you have missed out one of the arrows : taxes leaving the private sector economy and going into the public sector.

In general, money that people spend in the private sector is much more voluntary than the money that those same people spend on the public sector.

We do not live in a direct democracy so we have no idea whether those paying the taxes actually want every item of government spending to be at higher, lower or the same level as it is currently.

Representative democracy allows the public sector to hide behind the argument that the people have voted for all of their spending. So many people find that their "least worst" choice of party is still so far from their own beliefs that they end up withdrawing from the political process which is why voter turnout is low (and generally declining) globally.

I would have much more sympathy for the public sector and the way that it operates if all of us had a chance to vote on their actions more directly. People who work in the public sector tend to be about power and control so it is unlikely that they will give the people who pay them the opportunity to tell them what to do more directly.

[hilltop]

The real issue is that many governments of all persuasions at at all levels have lost sight of the fact that every penny of government spending has to eventually be generated from a productive activity, either concurrently or in the future.

Many governments seem to think that spending actually comes from some sort of magic tree and it really doesn't matter how much they spend.

Perhaps. But that is not the issue here. The Audit arrangements must be there to hold decision makers to account, literally.

I do not see that Pickles' proposals will add to the quality of scrutiny.

If public spending is being reduced, it becomes more important to ensure that it is spent properly.

Anyway, weren't we promised more consultation on the big decisions?

[LuckyOne]

Perhaps. But that is not the issue here. The Audit arrangements must be there to hold decision makers to account, literally.

I do not see that Pickles' proposals will add to the quality of scrutiny.

If public spending is being reduced, it becomes more important to ensure that it is spent properly.

Anyway, weren't we promised more consultation on the big decisions?

The valid question implied upthread is what does that Audit Commission do that the National Audit Office doesn't already do?

I don't know the answer but my guess is that one is a civil service operation with civil service wages that does a valuable and effective job while the other is an ineffective quango with an unfocused mandate to oversee the civil service paid at much higher rates.

[@contradevian]

Well the Audit Commission "charged with investigating local authority investments into Icelandic banks, has revealed that it too had £10 million stashed away in Landsbanki and Heritable. And it was invested only three months ago"

http://iaindale.blogspot.com/2008/10/who-should-audit-audit-commission.html

[Mal Volio]

In the private sector, you have missed out one of the arrows : taxes leaving the private sector economy and going into the public sector.

No, I'd included that

You can also include the public sector, and its employees, buying goods & services from the private sector. That's there too

In general, money that people spend in the private sector is much more voluntary than the money that those same people spend on the public sector.

For a value of "voluntary" that adds a certain weight to individual-level decision-making over societal, sure. I said that.

I would have much more sympathy for the public sector and the way that it operates

That's nothing to do with the economic boxes I described; it's your own political viewpoint. Which is fair enough, but it's not the same thing.

[The Masked Tulip]

I had no idea that the Audit Commission and the National Audit Office were two separate organisations -WTF!!!

[LuckyOne]

No, I'd included that

You can also include the public sector, and its employees, buying goods & services from the private sector. That's there too

For a value of "voluntary" that adds a certain weight to individual-level decision-making over societal, sure. I said that.

That's nothing to do with the economic boxes I described; it's your own political viewpoint. Which is fair enough, but it's not the same thing.

So help me out here. Are you trying to make the point that it doesn't really matter how big or small the state is relative to the private sector from an economic standpoint?

[Mal Volio]

So help me out here. Are you trying to make the point that it doesn't really matter how big or small the state is relative to the private sector from an economic standpoint?

Yep. You could construct a model of a society which is all public sector, or one that is all private. I'd not much wish to live in either, mind, but with the appropriate degree of brutality either could tick along.