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Categories:Advisers,Regulation

National Audit Office to audit FSA

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The Government has announced the National Audit Office will audit the FSA from 2010 -11 onwards.

In a little noticed statement to Parliament on October 22, Exchequer secretary to the Treasury Sarah McCarthy-Fry said: “The NAO has a valuable role to play in delivering transparency and accountability, so I am pleased to announce today that the Financial Services Authority has decided to appoint the Comptroller and Auditor General as its financial auditor from the next financial year, 2010-11.

“That will enable the Public Accounts Committee to receive and investigate reports into aspects of the economy, efficiency and effectiveness of the FSA’s performance. I welcome that decision and believe that it can only enhance the FSA’s standing and enable it to show how well it discharges its business.”

Aifa director general Chris Cummings, who has campaigned for a regular NAO audit of the FSA, has welcomed the move and says the FSA must be held to account.
 
He says: “With a budget that has rocketed to nearly half a billion pounds a year, it’s critical that the FSA is held to account. We have always said that, as a statutory body, FSA must be more transparent and clearly demonstrate value for money. The appointment of the NAO ensures that the Public Accounts Committee can fully scrutinise FSA’s performance on a regular basis.
 
“NAO last conducted a one off review of FSA in 2007, following calls from Aifa and others in the industry. At that time, the NAO recognised the progress FSA had made since its inception in 2002, but stated that FSA had to do more to demonstrate its impact and provide a clearer indication of what its different activities cost. These points still hold true today.”
 
Cummings says the appointment of the NAO will help realise the relative effectiveness of regulatory interventions.

He says: “We can not just have change for change’s sake. There must be a clear and demonstrable benefit to consumers and industry. The NAO’s appointment is a big step towards achieving this goal.”

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Readers' comments (13)

  • It would be a good idea to send the NAO to do an audit of the BBC next.
    To ensure and uncover where the license tax payers money is going, as a freedom of information request is required by the press for every disclosure.

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  • One Quango checking on another quango, that's a good idea as last time all was ignored when the NAO was involved. Lets have another quango to check out the NAO and then another one to check them out and so on...... What a waste of time and money. The FSA has failed in every respect, the only respectable thing to do is shut the place down and give the staff cleaning jobs.

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  • Sarah McCarthy-Fry has already pre-judged the outcome of the 2010/2011 audit with her comment "and enable it to show how well it discharges its business".
    Which planet has she been on for the past two years while the FSA have brought shame upon themselves.This is another case of being completely out of touch with the reality of what is happening to propper people just like the two members of the MP's expenses supervisory committee who have had to stand down because of malmanagement of their own affairs.
    Just another ineffective proposal!

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  • To: 'Incompetent Regulators Awards Team'

    If you look into the NAO they are not a government quango per se. Their budget is set by parliament, not the Government.

    On and the NAO is scrutinised by the Public Accounts Committee.... which is widely held to be one of the best committees in the House...

    Why not actually learn something before sprouting off??! :))

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  • Mr Steele,I suggest before you hold up the NAO in such high opinion , I suggest a little research on your part first.In the past many audits were carried out by senior officials over some very expensive lunches with a few nods and winks.Anyone who beleives the NAO has any credibility left should see the comprehensive and devestating reports in Private Eye over the last 2-3 years (never challenged by anyone named and shamed).The Public Accounts Committee do not come out at all well either as their so called scrutiny and standards left a lot to be desired.When you have read it then we can talk about sprouting off!

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  • If the NAO would like a list of items for its agenda, then I'm sure there'll be no shortage of eager applicants ready and willing to help compile it. Salary levels, bonuses, golden oparachutes, objets d'art, budgets for Christmas and leaving bashes, expense accounts, accommodation costs. If every single one of those items isn't firmly on the NAO's agenda, then it really will be a whitewash, won't it?

    An open and transparent regulator? A world class regulator? A regulator that uses its resources as cost effectively as possible, undertaking cost:benefit analyses before imposing new regulatory initiatives. Phaawww ~ what's that suffocating and overpowerinbg smell?

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  • If i'm correct the Quango which is the FSA has the second largest amount of staff on salaries of over £100,000.00 P.A,Second only to the BBC.I believe the figure to be 142 staff on this amount.

    For me the FSA have failed,time and time and time again in their role as regulator,yet I'm yet to read about any of them being sacked,or even disciplined over these repatative failures.WHY?

    I don't know how they compare with the nose in trough institutionalised theft that is expenses,but suspect,as with everything connected with New Labour they will have done quite well there too.

    Why do they need 142 staff on £100,000.00 or more? what do they bring to the company to warrent such salaries? who elected them? who are they?

    Finally the cynical part of me asks,whats the point of offering to audit a company after the next general election,when by all predictions thus far David Cameron will be elected and he's said he would scrap the FSA.Another "too little too late" Labour ploy.

    I for one,wont miss either New Labour,or the FSA.

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  • You need the NAO to investigate "the economy, efficiency and effectiveness of the FSA’s performance." After allowing the banking system to fail the whole country already knows that.

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  • well done Chris Cummings. More pressure is needed to be brought on the FSA to get its costs down.
    Go for the Kinnock brigade in Brussels next !

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  • In June 2006 I wrote to the FSA requesting a NAO review. I was told that: “the FSA is a private company limited by guarantee and it is directly financed by the industry. As such it implements the audit requirements applicable under company law. The FSA has no financial relationship with Government or Parliament and is not to be regarded as acting on behalf of the Crown”.

    I challenged this but what seems strange to me is how we are told one this one year and another thing when its suits.

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