Watchdog loses GM audit battle

David Walker

The Government has rejected a bid by the local government watchdog, the Audit Commission, to take over checking the spending of grant-maintained schools and further education colleges.

But it is urging the commission - whose powers Labour says it wants to expand - to do one-off studies comparing the performance of GM and local authority schools.

The commission had wanted to examine accounts and value for money performance in all schools. But a new white paper on auditing public bodies backs maintaining the status quo for GM schools. They appoint their own auditors, subject to inspection by the Funding Agency for Schools.

The National Audit Office, the investigative arm of the House of Commons Public Accounts Committee, checks the agency's books, and each year examines a sample of GM school accounts.

The Audit Commission and the National Audit Office recently have been engaged in what some commentators have called "audit wars" in education and health. The Government suggests they look at "rationalising their activities". Schools and colleges outside the local government sector "should consider drawing on the expertise of both the English national audit bodies on audit arrangements and value for money work".

The white paper is based on a review by the Treasury and Cabinet Office as part of the Government's response to the work of the Committee on Standards in Public Life chaired by Lord Nolan. Its report on quangos is due to be published shortly. Roger Freeman, minister for public service, called it a "framework for accountability".

The Funding Agency for Schools and the Further Education Funding Council were this week studying the white paper, especially its recommendation that "they consider ways in which they can draw on the expertise of the national audit agencies on audit arrangements and on value for money work".

The Government says the Audit Commission already has legal powers to look at the operations of the funding agencies. It is therefore "in a position to facilitate comparisons with local authority schools".

The white paper commends the Department for Education and Employment's internal review of the way the books of training and enterprise councils are examined. Some TECs can face several audits - by Whitehall departments, government regional offices, the European Court of Auditors and the National Audit Office - and the Government is seeking ways of "reducing the audit requirement without limiting its effectiveness".

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David Walker

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