HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Wednesday, 20 March 2013

Auditor Independence - Perceptions Matter

As an ex auditor (both external and internal) and having had some considerable experience of fraud investigations and compliance work, I can state that it is a fundamental requirement in order for an auditor to be able to do his/her job in a professional and credible manner (and for the audit report to have credibility) that he/she and the department that they work for are not only independent but perceived to be independent.

When that independence is undermined by, eg, an unhealthy close relationship with the auditee, or by unhelpful dissemination of information about ongoing audits to third parties, then the auditor can no longer perform his/her function.

My thanks to a loyal reader who pointed me to a recent article in the Guardian that shows that the National Audit Office (NAO) has had its independence severely compromised by the alleged actions of its own boss Amyas Morse.

The Guardian reports that Morse, who set up a judge-led review into the "sweetheart" multimillion-pound tax deals between HMRC and corporations, undermined the whole process by telling Dave Hartnett (when he was still head of HMRC) that the inquiry would find "nothing of substance".

For good measure Morse told his staff that the review by Sir Andrew Park would find no evidence of serious wrongdoing.

In an email marked "private and confidential – please do not pass on to anyone without coming back to me", sent by Hartnett on 15 December 2011 to 10 senior HMRC officials Hartnett wrote that he had held a meeting that afternoon with Morse which was "useful and interesting". 
Hartnett went on: 
"Amyas has been insistent that Andrew Park tackles the cases one at a time. He [Morse] has told me that he has made clear to the NAO that his expectation is that nothing of substance will be found in the review."
Morse apologised for the way that Hartnett's officials had been treated by PAC:
"He [Morse] did not envisage things playing out the way that they have and was sorry for the individuals in HMRC who had been bruised by the actions of the PAC and for the difficulties the department had experienced." 
It is clear from the text that the relationship between NAO and HMRC has become far too cosy; as such the perceived independence of NAO has been severely compromised, which means that NAO can no longer perform its role effectively.


By the way, does anyone know what has happened to the whistleblower Osita Mba?
Tax does have to be taxing.

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  1. The clue to the incestuous relationship between HMRC and Amyas Morse was placed before this forum some months ago when Homer appeared before Margaret Hodge & the PAC and referred to Morse as Amyas, in cordial terms when making a reference in reponse to a question put to her by the PAC.
    The poster raised then the spectre of the relationship but the possible significance of this was missed.

    1. Fair point, but using a Christian name of an auditor is not in itself proof of an overly close relationship.

  2. This was a PAC meeting with a formal minuted content, I would not have expected anything other than the use of Mr or whatever relevant title from the head of a Government Department referring to the Head of the Governments NAO.
    What next Homer and Hodge referring to each other as Margaret and Lin?

  3. Hey, where's the first, lengthy post gone?

    1. what lengthy post?

      No comment has been deleted or caught in the spam filter

    2. My mistake, forgot which thread it was on, carry on!

    3. LOL:)

      It must have been the excitement of Budget Day going to your head;)

    4. Not half as excited as Mr Deputy Speaker was getting!

  4. Recorded message on HMRC phone lines expect to have to wait longer as a result of industrial action...

  5. An Amoeba would be capable of working out that something drastic is wrong at the heart of HMRC.
    It is about time the PAC and those politicians left out there that possess a semblance of responibility took the poisonous snake by the throat and did the right thing - ?
    Yep, dunno what the answer is either, but things cannot continue as they are.

  6. I am really starting to worry for Osita Mba - does no-one know what happened?