Checks and Balances

Normally our Report of the Week focuses on an interesting or challenging publication recently released.

This week we take a slightly different course – as we were researching for this Week’s release, we came across the 2008 inquiry into the United Kingdom Parliament expense allowance scandal.

As Wikipedia notes:

The United Kingdom parliamentary expenses scandal was a major political scandal triggered by the leak and subsequent publication by the Telegraph Group in 2009 of expense claims made by members of the United Kingdom Parliament over several years.

Public outrage was caused by disclosure of widespread actual and alleged misuse of the permitted allowances and expenses claimed by Members of Parliament (MPs), following failed attempts by parliament to prevent disclosure under Freedom of Information legislation. The scandal aroused widespread anger among the UK public against MPs and a loss of confidence in politics. It resulted in a large number of resignations, sackings, de-selections and retirement announcements, together with public apologies and the repayment of expenses.

What strikes the reader of what is officially known as the Third Report of Session 2007-08 of the House of Commons Members Estimate Committee is that this issue – despite involving elected representatives – has as its core the same issues that any organisation faces in managing allowance.  The report notes:

A critical component in the task of rebuilding public confidence in Parliament’s allowances regime has to be an overhaul of the systems which exist to verify claims, check the uses to which resources are being put, and secure value for the public’s money. From the start of this review, we identified that our top priority would be to bring forward a robust and transparent process for claiming allowances and auditing them. 

As an interesting aside, the United Kingdom Comptroller and Auditor General advised the Committee that the essential components of an effective assurance regime are:

  • clear rules and guidance as to what is and what is not acceptable under the rules
  • robust management controls and processes, designed to ensure compliance with the rules
  • checks and testing of the controls, to ensure that they are adequate and effective
  • reporting on the outcome of those checks to those wanting the assurance. 

This is an excellent report upon which any organisation could base their assessment of their allowances regime.

And perhaps the last word should be left to the Committee about the failings of the past impacting on the current day operations of Parliament:

The essential weakness is that an MP’s signature certifying that the claimed expenditure is “wholly, exclusively and necessarily incurred to enable the Member to perform their parliamentary duties” is effectively the last word on the validity of the claim. We are convinced by the argument that this arrangement can no longer be sustained. Viewing a gentleman’s word as his bond, beyond all further challenge, belongs more to a 19th century club than to a 21st century legislature.

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