Common use of Audit and the National Audit Office Clause in Contracts

Audit and the National Audit Office. Guidance: It is very important to a CLIENT that it can gain access to certain information held by the SERVICE PROVIDER in relation to the Services and to make checks as to how the Services are being provided. The purpose of clause 39 is to set out the purposes for which the CLIENT may conduct an audit. It is only an illustrative list and should be reviewed on a case by case basis and amended, as necessary, to meet the specific requirements. However, care should be taken so that the audit rights that are required by the CLIENT in order to comply with its own legal duties and requirements are not deleted and the CLIENT’S position compromised. The CLIENT should endeavour to provide notice of its intention to conduct an audit. The SERVICE PROVIDER may want the CLIENT to accept more commitment than this clause provides for but there will be circumstances where the CLIENT cannot do so. For example: the CLIENT has reasonable grounds to suspect that the SERVICE PROVIDER is in material breach of its obligations or other circumstances (e.g. fraud) have arisen which would give rise to the CLIENT having the right to terminate this Agreement; the CLIENT has reasonably held concerns about the solvency of the SERVICE PROVIDER; or where an audit is required by a Regulatory Body. Consequently, the CLIENT cannot commit to always giving prior notice of an audit. 39.1 The SERVICE PROVIDER shall keep and maintain until six (6) years after the date of termination or expiry (whichever is the earlier) of this Contract (or for such period as may be agreed between the Parties), full and accurate records and accounts of the operation of this Contract including the Services provided under it and the amounts paid by the CLIENT. 39.2 The SERVICE PROVIDER shall keep the records and accounts referred to in Clause 39.1 above in accordance with good accountancy practice. 39.3 The SERVICE PROVIDER shall on request afford the CLIENT, the CLIENT'S representatives and/or the National Audit Office (“Auditors”) such access to such records and accounts as may be required by the CLIENT from time to time. 39.4 The SERVICE PROVIDER shall provide such records and accounts (together with copies of the SERVICE PROVIDER’S published accounts) during the Contract Period and for a period of six