The National Audit Office has opened a fresh investigation into the funding of Big Society Network, to establish whether the issues identified in its first report indicate “wider systemic problems” within government and the Big Lottery Fund.

And it has said that the report from its new investigation could be laid before Parliament, so that its contents are covered by Parliamentary privilege.

Parliamentary privilege protects MPs against civil liability for actions done or statements made in the course of their legislative duties and allows them to speak freely during Parliamentary debates without fear of being sued for slander.

Asked by Civil Society News whether the NAO was planning to reopen its investigation into Big Society Network funding, a spokeswoman provided the following statement:

“In July 2014, the NAO published the results of an investigation which found that the Big Lottery Fund and the Cabinet Office had not correctly followed their procedures for awarding and monitoring certain grants.

“This follow-up study will look at further grants given to the Big Society Network and the Society Network Foundation, and other related grants, to determine whether the issues found in the first investigation indicate wider systemic problems.”

The spokeswoman said she could not provide any more information about the remit or reasons for the new study, but added: “It is possible that this report will be laid before Parliament which means that the contents is covered by Parliamentary privilege.”

Civil Society News has seen an email written last month by Victoria Keilthy, the NAO director with responsibility for third sector delivery, in which she said she had examined two letters from then-minister for civil society Nick Hurd dated 15 and 31 January 2013.  She said that the contents of the letters showed that “there is a potential lack of clarity about the extent to which the Cabinet Office/minister for civil society were involved in the selection of projects for funding from the Social Action Fund”.

In her email, Keilthy agreed to take this up with the Cabinet Office. However, the new investigation being undertaken by the NAO is not being led by Keilthy and her team, but by Keith Davis and Susan Ronaldson, the directors with responsibility for the Cabinet Office and cross-government matters.

Their report is due in late autumn 2014.

The NAO’s first report, published in July, found that the Cabinet Office and Big Lottery Fund flouted or altered their own guidelines to ensure that nearly £3m found its way to Big Society Network and its parent charity, Society Network Foundation. Very few social outcomes were achieved with the funding.

Nick Hurd stepped down from his post as minister for civil society a week before the NAO report was published. The Cabinet Office is now trying to recover nearly £34,000 from Society Network Foundation, claiming it was not spent in line with the grant agreement.

Civil Society News also reveals today that the chair of the Big Lottery Fund’s risk committee was an adviser to Big Society Network when he was appointed to the BIG board by the Cabinet Office in December 2012. Click here for more on this.