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Appointment of Professionally Qualified Audit Staff

The work of the E&AD clearly needed to be of a high standard in the new era of accountability and financial control being introduced under the Fisher reforms and to implement the provisions of the 1921 Act. Well-trained staff, therefore, were essential. One of the more important domestic measures introduced during Gibson's period as C&AG, and one of his lasting legacies, was his decision in 1917 to commission a review of staff training. The review was carried out by a small committee led by John Tenney, one of the Directors of Audit. It was prompted by serious concerns over two cases where the conduct of the audit was found to be unsatisfactory. The Tenney Committee's reports in 1917 and 1918 dealt with the lessons learned in these particular cases and what needed to be done to update audit guidance, clarify the responsibilities of the different audit grades, and revise the classification of accounts.

A more fundamental issue identified by Tenney was the need to improve staff training at all levels on a more systematic and professional basis. The existing civil service approach of 'Sitting beside Nellie', where officers learned on the job by working alongside more experienced staff, would no longer suffice, for a variety of reasons. A significant number of permanent but relatively inexperienced officers were returning from war service and new entrants were also being recruited to replace temporary wartime staff. With audit moving increasingly away from detailed checking to a more analytical and broader-based scrutiny and test examination, a wider knowledge of accounting principles and practice was required. The development and examination of new forms of account, including the growth of trading and manufacturing accounts, required a greater understanding of commercial accounting and cost accounting. The continuing move towards expanding the range and depth of value-for-money examinations also required further investment in development and training.

After considering the training arrangements in a number of bodies in the public and private sector, including the Institute of Chartered Accountants, the Tenney Committee's fourth report in October 1918 recommended that a more demanding system of professional training should be compulsorily required for all new entrants, with voluntary arrangements for some existing staff. These should be centred on a specially commissioned series of lectures at the London School of Economics (LSE). This external three-year course was to be supported by a revised scheme for moving staff around on jobs with appropriate training opportunities. New assessment and promotion procedures meant that staff could only progress up the pay scales if they passed the required examinations. C&AG Gibson approved virtually all the Tenney Committee recommendations in May 1919 and 'Ten gentlemen of the Office, some newly returned from the War duly attended the London School of Economics for the first series of lectures at a fee of half a guinea a term.'

The LSE since the early 1900s had established a key role in the education of military officers in the practices of business.[1] Between 1907 and 1914, each year thirty students in the latter part of their careers were selected to begin their twenty-week course in October, finishing in the following March. The students were most often officers of the rank of captain and above, selected from line commands and most of the administrative departments, with the Army Service Corps providing each year the largest number of students.[2] Other departments which were eligible to provide students included the Royal Artillery, Royal Engineers, Infantry, Medical Corps, Ordnance Corps and the Indian Army.[3] The students were instructed by eminent experts in their fields who were drawn from business, the universities, and government. Richard Haldane was a frequent lecturer and Sir Charles Harris and Colonel Grimwood of the Finance Department at the War Office, who had been implacable critics of Army accounting systems,[4] took an active interest in the success of the Army class, with Harris appearing often as a guest lecturer.[5]

A follow-up review of the LSE classes for E&AD staff concluded that the new system had been less successful than expected. This was partly because the exceptional intake of some eighty new Assistant Auditors between July 1919 and January 1921 had overwhelmed the arrangements for allocating staff to the work of the Department. Also, the external lectures were heavily directed towards commercial and private sector circumstances and left large areas of the Department's parliamentary work barely covered, for example on regularity audit and examinations of stores and contracts. Proposals to second staff for training to other suitable departments had also proved impracticable. Although a Staff Training Board had been set up it was never put into operation.

The review committee recommended that the external lectures at the LSE should be revised and continued but should be supplemented by a range of internal lectures on areas directly relevant to the Department's work, including public sector accounts and constitutional and parliamentary issues. Arrangements for allocating staff to suitable training posts were revised and a special training officer appointed. This remained the basis of post-entrant training into the 1960s, with the lectures at the LSE having been transferred in the 1950s to the City of London College. By the 1970s the required training for new entrants had become a full professional qualification under the Chartered Institute of Public Finance and Accountancy. In the 1990s this was switched to qualification under the Institute of Chartered Accountants.

  • [1] Funnell, 2006.
  • [2] Gilbert, 1961, p. 21;Dahrendorf, 1995, p. 89;Amery, 1909, p. 620;Advisory Board, 1911, p. 3,and 1912, p. 3;LSE Archives, File 232/B;'B' 1907, p. 673.
  • [3] Badcock, 1926, p. 104, Badcock, 1925.
  • [4] Harris, 1911, pp. 65, 67;Harris, 1931, p. 314;Committee to Consider Decentralisation of WarOffice Business (Brodrick Committee) 1898, Questions 484-7, p. 21.
  • [5] Letter from Lawrence Dicksee to LSE, 14 June 1919, LSE Archives, File 232/C and 232/D;Grimwood, 1919.
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