NAO admits errors in its own accounts

The National Audit Office has admitted to mistakes in its own accounts.

Sir John Bourn, the head of the body, is facing questions over the accounting for his wife’s expenses, which will be recorded in the NAO ’s books from now on.

Expenses incurred by his wife when accompanying him on overseas trips were not recorded in his remuneration, nor the tax paid on them. The NAO’s own audit committee has now decided they should have been.

The revelations result from huge expenses incurred by Sir John’s wife for overseas travel. Though his own expenses are not disclosable, expenses for his wife, who accompanied him on trips, should have been reported as part of his remuneration, the NAO has concluded, as well as the tax paid on the benefits by the government body.

Those amounted to thousands of pounds. Her expenses were, annually from 2001/02 to 2005/06: £7,432, £18,394, £25,811, £24,969 and £25,309. The corresponding tax bills paid by the NAO were £6,432, £15,924, £22,713, £21,972 and £22,272.

The total benefits over the five years were £191,000.

A memo submitted by the NAO last month to a parliamentary committee investigating allegations of excessive spending on travel revealed that Sir John was taxable on the benefit that arose from his wife accompanying him on 24 trips over three years.

The remuneration report in the NAO’s accounts for these and earlier years disclosed only Sir John’s salary, £155,000, last year.

When the omitted benefits became apparent, the organisation’s Audit Committee met and concluded that they should be reported, an NAO spokesman confirmed.

The 2006/07 accounts, due to be published in the next few weeks, will show the benefits.

The revelations follow a long investigation of the expenses of Sir John by Private Eye magazine, and will prove acutely embarrassing for an organisation that audits £500bn of public spending every year and can be highly critical of government bodies with accounting issues. Sir John is also a member of the Financial Reporting Council and head of the Professional Oversight Board.

For more, go to the public accounts commission website at www.parliament.uk