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| Supreme Audit Institution of the United Kingdom (National Audit Office) | |
|---|---|
| Name | National Audit Office |
| Formation | 1983 |
| Predecessor | Exchequer and Audit Department |
| Type | Supreme audit institution |
| Headquarters | London |
| Leader title | Comptroller and Auditor General |
| Leader name | Gareth Davies |
Supreme Audit Institution of the United Kingdom (National Audit Office)
The Supreme Audit Institution of the United Kingdom (National Audit Office) is the independent public audit body charged with auditing public sector bodies in the United Kingdom, reporting to the Parliament of the United Kingdom through the Comptroller and Auditor General. Established from predecessors including the Exchequer and Audit Department and shaped by statutes such as the National Audit Act 1983, the institution produces value‑for‑money and financial audit reports that inform scrutiny by the Public Accounts Committee and other parliamentary select committees. Its work intersects with institutions such as the Government of the United Kingdom, Her Majesty's Treasury, and international bodies like the International Organisation of Supreme Audit Institutions.
The office traces origins to the Exchequer and the post of Comptroller of the Household evolved into the Comptroller General and later the Comptroller and Auditor General. Developments during the Industrial Revolution and reforms in the Victorian era prompted establishment of formal audit machinery, notably the Exchequer and Audit Department and later the Exchequer and Audit Department Act 1866. Twentieth‑century pressures from events such as the First World War and the Second World War expanded public expenditure and administrative complexity, leading to the enactment of the National Audit Act 1983 which created the NAO in its modern form, aligning practices with standards advocated by the International Monetary Fund and the World Bank.
The NAO derives its mandate from the National Audit Act 1983, which sets out the powers of the Comptroller and Auditor General and the NAO’s duty to report to the Public Accounts Committee. The NAO’s statutory footing interacts with constitutional conventions relating to the Crown and parliamentary sovereignty as articulated in sources like the Bill of Rights 1689 and principles discussed in judgments of the Supreme Court of the United Kingdom. Its remit overlaps with audit arrangements under statutes such as the Local Government Act 1972 and interacts with devolved bodies including the Scottish Parliament, Senedd Cymru, and the Northern Ireland Assembly where separate audit institutions like the Audit Scotland and the Northern Ireland Audit Office operate. Internationally, NAO practice is informed by standards from the International Organisation of Supreme Audit Institutions and the International Federation of Accountants.
The NAO is headed by the Comptroller and Auditor General, an officer appointed by letters patent and accountable to Parliament; recent holders include Sir John Bourn and Amyas Morse. Operational leadership comprises executive directors and board members drawn from professional streams including former Institute of Chartered Accountants in England and Wales members and public administration specialists with ties to entities such as the Chartered Institute of Public Finance and Accountancy. The NAO’s governance includes an external audit committee and internal oversight mechanisms that echo governance norms found in bodies like the National Audit Office (organisation) and corporate governance codes influenced by the Financial Reporting Council. Its staff have professional links to organizations such as the Royal Audit Institution and training affiliations with universities including London School of Economics and University of Oxford.
The NAO conducts statutory financial audits of central government departments, executive agencies, non‑departmental public bodies, and others specified by the National Audit Act 1983; it examines entities ranging from the Ministry of Defence (United Kingdom) and the Home Office (United Kingdom) to agencies such as HM Revenue and Customs and National Health Service (England) bodies. It undertakes value‑for‑money studies, performance audits, and investigations into matters raised by the Public Accounts Committee, working alongside bodies like the National Audit Office (United Kingdom) and coordinating with the European Court of Auditors on EU‑related matters. The NAO’s remit includes auditing accounts of public corporations such as BBC, Network Rail, and other statutory corporations.
Methodological frameworks used by the NAO reference auditing standards promulgated by the International Federation of Accountants and guidance from the International Organisation of Supreme Audit Institutions. The NAO applies financial audit standards such as International Standards on Auditing and deploys value‑for‑money methodologies adapted from practices in organizations like the Organisation for Economic Co‑operation and Development and the World Bank. It publishes audit manuals and guidance detailing sampling, materiality, and evidence standards, paralleling protocols used by professional bodies including the Institute of Chartered Accountants of Scotland and the Chartered Institute of Public Finance and Accountancy.
The NAO’s high‑profile reports have addressed issues from procurement at the Ministry of Defence (United Kingdom) and the National Health Service (England) to infrastructure projects such as Crossrail and High Speed 2 (HS2). Notable investigations have influenced parliamentary scrutiny of events including the Iraq War logistics and the 2012 London Olympic Games procurement, and have prompted policy responses from Her Majesty's Treasury and ministers in the Cabinet Office. NAO findings have been cited in inquiries like the Public Accounts Committee hearings, judicial reviews in the High Court of Justice, and debates in the House of Commons and House of Lords.
Although independent, the NAO is accountable to Parliament: its reports are laid before the House of Commons and examined by the Public Accounts Committee. The Comptroller and Auditor General appears before select committees and parliamentary debates; the NAO’s own accounts are externally audited by private sector firms regulated by the Financial Reporting Council. Internationally, the NAO participates in peer reviews through the International Organisation of Supreme Audit Institutions and cooperates with counterparts such as Audit Scotland, the Comptroller and Auditor General of India, and the United States Government Accountability Office.
The NAO has faced criticism over perceived limitations in scope when auditing privatisation deals, complex public–private partnerships like PFI, and for debates over confidentiality versus transparency in reports related to national security, sparking disputes involving the Ministry of Defence (United Kingdom) and the Cabinet Office. Controversies have included tensions with ministers following critical reports on projects such as Crossrail and High Speed 2 (HS2), challenges about audit timeliness debated in the Public Accounts Committee, and critiques from think tanks including the Institute for Government and media outlets such as the Financial Times and The Guardian regarding methodology and influence.
Category:Audit institutions