Quality • Agility • Culture
Independent audit support for the National Audit Office's review of National Highways
The National Audit Office needed independent, expert assurance on how National Highways values its structures and calculates their depreciation. Oxivity provided the auditing resource.
- Client
- National Audit Office
- Programme
- National Highways structures valuation, £1bn+
- Role
- Expert audit resource, supporting Ryder Levett Bucknall
- Focus
- Asset valuation and depreciation
The challenge
Testing the methodology behind a £1bn+ asset valuation
The National Audit Office, the UK's independent public spending watchdog, was auditing National Highways' approach to structural quinquennial rates and to calculating structure depreciation from condition measurements. It needed an independent consultancy to review whether the methodology for valuing structures and tunnels was appropriate, whether the costing rates were reasonable, whether changes to the method or key assumptions since the previous year were justified, and whether the methodology had been applied correctly across a sample of structures.
Our approach
Three tests, applied consistently
Oxivity supported Ryder Levett Bucknall by providing expert auditing resource to independently assure the initial findings from WSP. We audited both the structural quinquennial rates and the structure depreciation against three tests: does the methodology align with current best practice, are the assumptions and parameters justifiable, and are there reasonable alternatives that would better connect the valuation process with asset management practice. We followed the structure of previous annual reports so the findings could be read alongside them.
Outcome 01
Two detailed audit reports after a three-month commission, answering each point in the National Audit Office's brief with material findings it could present.
Outcome 02
Findings covered deterioration curves, replacement cost weightings, traffic management costs, severity and extent, condition data errors, and the rates and indexation reviews.