National Audit Office urges greater use of open-book accounting data

The National Audit Office has called on government bodies to negotiate greater access to open-book accounting data.

In a report the spending watchdog said better use should be made of such information, which reveals how much outsourced public services are actually costing suppliers and therefore how much profit they are making.

According to research by the NAO, open-book accounting data is currently available in only 31% of contracts. Even in those cases, the information is not always received.

The NAO report identifies five approaches to collecting and using information on suppliers:

• ensuring price complies with the contract;
• making better informed commercial decisions;
• assuring processes;
• maintaining control of risk; and
• achieving step-change innovation.

The watchdog called for every major contract to have a strategy for the collection and use of information.

The NAO also said that every government department should have a policy on when it will use open-book accounting. Only 23% of government organisations have such a policy, it revealed.

The report, Open-book accounting and supply-chain assurance: case studies, also recommended that the Cabinet Office:

• set up a task force to establish a common standard for open-book data, “since suppliers complain that government currently asks for data in a variety of different formats”; and
• develop better guidance for interpreting suppliers’ costs and profits.

Amyas Morse, head of the National Audit Office, said: “Contract management is not a desk job. We are reminded of this in all the best practice and the worst failures we see.

“For government to be accountable for contracted out public services; for it to understand its suppliers; for it to exercise oversight; and for it to promote value for money, it requires its contract managers to take a ‘hands-on’ approach and to go and see for themselves what their suppliers are doing.”