Report Finds BBC Improved Financial Management Amid Limited Resources

5:06 AM PST 11/20/2012 by Georg Szalai

But a review also argues it must strengthen its financial reporting to better align spending with strategic and editorial priorities.

LONDON - The BBC has improved its financial management amid more limited resources and managed to save money, but should strengthen its financial reporting to monitor more regularly how its spending aligns with strategic and editorial priorities, according to a report by Britain's National Audit Office.

The National Audit Office is an independent organization that analyzes if public bodies use financial resources efficiently and reports to the U.K. parliament. The report was compiled for the BBC Trust, the public broadcaster's governing body, and published Tuesday.

The broadcaster's financial management is regularly reviewed, because U.K. households contribute to the BBC's finances via a license fee that all taxpayers are charged. The attention to financial decisions is a key reason for the big outcry last week when it emerged that the BBC Trust would pay George Entwistle $715,000 after his resignation as director general - a decision that NAO didn't review in its latest report.

"The BBC has strengthened its approach to financial management, which has helped it meet savings targets," said Amyas Morse, head of the National Audit Office. Monitoring changes at the U.K. public broadcaster "will put it in a better position to decide how best it uses its shrinking resource[s] in a way that offers value for money for the license fee payer and still delivers the performance viewers and listeners expect."

"We are pleased that the NAO has concluded that BBC's approach to managing its finances has improved and supports the BBC's delivery of value for money for license fee payers," said BBC Trust member Anthony Fry. The National Audit Office (NAO) found that the BBC has "successfully challenged its costs through a series of efficiency programs."

In another positive, the NAO said that the BBC is "making more effective use of the skills and independence of its non-executive directors to help it scrutinize and challenge major financial decisions." Critics have previously raised concerns that the broadcaster did not subject spending decisions to sufficient challenges and reviews.

But NAO also said that it was unclear if new processes that benchmark its costs internally and in comparison with other organizations have yielded success. "It is not clear that the results of benchmarking have so far influenced the BBC’s cost reduction plans, the NAO wrote.

Plus, the broadcaster's financial reporting is "slow and resource-intensive," meaning that the BBC "cannot easily monitor what it is spending against its strategic and editorial priorities, which will become more critical as resources become squeezed."
 
The BBC Trust said it would work with U.K. media regulator Ofcom to identify opportunities to co-ordinate the financial information that each body gets the BBC to streamline reporting procedures.

Said Fry: "At a time when the BBC's resources are being squeezed and when it needs to achieve substantial savings over the next few years, getting this right is more important than ever."

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

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