| ADMINISTRATIVE WEAKNESSES
|
| |
C&AG(NI)'s Report, paras 4.2 to 4.4
para 2.7
| 4. A wide range of general guidance and best practice is available which DOE could have used to establish and develop appropriate criteria for assessing and funding BATs projects. However, although eight of the nine BATs teams have been established by 1988 and the Central Unit by early 1989, the issue of formal guidance notes for staff did not commence until November 1990. Issues continued thereafter on a piecemeal basis and comprehensive guidance was not in place until 1995. DOE said that, as the initiative was designed to be risk-taking and innovative, it was obvious that practice would change and develop over the period. There was no formal training for staff because, in DOE's view, the innovative nature of the initiative meant that none was available and the teams developed their own expertise.
|
| |
Qs 2, 9-13, 16, 36 and 37
C&AG(NI)'s Report, para 4.19
| 5. We questioned the Department on why it had not provided training and guidance from the beginning and why more had not been done to learn from experience gained on similar projects elsewhere. DOE told us that the team leaders were experienced civil servants who would have been familiar with the basic rules of government accountability and proper procedures. However the Department accepted that it could have learned more from the experience elsewhere. As the initiative developed lessons were learned and improved procedures were put in place. Nevertheless, we consider that the sources of best practice identified in the C&AG's report, together with the many reports and evaluations of other government-funded community development projects, should have been used to establish clear ground rules for staff from the outset. We agree with the C&AG that the lack of comprehensive guidance and training is likely to have contributed to the poor control, bad practice and inconsistency in approach highlighted in the audit findings.
|
| |
| C&AG(NI)'s Report, paras 5.3, 5.8 and 6.12 to 6.15
| 6. The Northern Ireland Audit Office (NIAO) examination of BATs project files revealed failures in fundamental standards of administrative practice and accountability. For example the standard of documentation was far below normal standards and in some cases was seriously inadequate. In 26 of the 27 projects examined where expenditure was more than £50,000, there had been no investment appraisal, or the appraisal was inadequate. There was also a failure to establish adequate monitoring arrangements to track the progress of projects.
|
| |
| Q 34
| 7. Investment appraisal is a well-established procedure aimed at ensuring that decisions are soundly based and value for money is secured. The Department admitted to us that there had been no proper appraisal of projects in the early stages of the initiative. We note its assurances that arrangements are now in place to appraise all projects.
|
| |
| C&AG(NI)'s Report, paras 6.13 to 6.15
| 8. An independent evaluation of the BATs initiative in 1991 concluded that monitoring arrangements had lagged behind other operational aspects. To demonstrate public accountability and to assist with the management and future direction of the initiative, the consultants recommended that more emphasis should be placed on establishing adequate monitoring arrangements, including regular pro-gress reports and site visits for large projects. These recommendations were fully accepted by the Department, but it was not until 1995 that adequate monitoring procedures were put in place.
|
| |
Qs 1, 3 and 4
Q 18
Q 19
Q 28
| 9. When asked why there had not been satisfactory arrangements from the beginning to ensure that public money was handled properly, the Department told us that the concept was to allow enthusiastic, experienced officers to use their initiative to decide what needed to be done. The pressure was to make a real difference on the ground as quickly as possible. There was a tension between the desire to make rapid progress, to be very flexible, not be hidebound by bureau-cracy, and the basic rules of government accountability. What went wrong was that the administrative support systems came along behind that. Arrangements were progressively improved as the years went by.
|
| |
| Qs 106-108 and 123
| 10. The Department admitted that there were serious weaknesses in the way the central management unit monitored the activities of one team in particular. DOE said if there had been an effective monitoring system to identify patterns of payments going to particular groups or individuals, the problems experienced might have been picked up earlier.
|
| |
C&AG(NI)'s Report, para 2.2
Qs 4, 14 and 15
| 11. The Department considered that the staffing of the initiative had been problematic and two consultants' reports referred to inadequate staffing for the task. DOE said it had underestimated the level of administration required and the time needed to work with community groups. The Central Unit had only two officers in post for the oversight and control of all nine Action Teams. However, this was no longer an issue because the number of Teams had now been reduced to four.
|
| |
| C&AG(NI)'s Report, paras 6.6 to 6.11
| 12. In 55 of the 98 projects examined by the Northern Ireland Audit Office, the Action Teams had not obtained the necessary receipts, invoices or other independently certified evidence to ensure that all the grant had been used for the purposes intended. In many instances grant had been paid in advance for goods and services and in other cases no action had been taken to recover grant which had not been used.
|
| |
| C&AG(NI)'s Report, paras 5.15 to 5.17
| 13. In a significant number of cases examined by NIAO, Team Leaders had exceeded their delegated levels of funding. DOE said the Action Teams had not realised that approval should be sought on the cumulative cost of a project but there was now clear guidance on this issue. Moreover there was no effective mechanism or management information system in place that would have enabled the Central Unit to detect instances where the delegated limit had been exceeded. The absence of such a control affected the ability of the Central Unit to identify potential irregular expenditure and to properly oversee the activities of the Action Team Leaders.
|
| |
| Qs 27, 29, 31-33, 38-42, 44-48, 59, 87 and 114
| 14. In the absence of satisfactory controls over the issue and use of public funds we questioned the Department on whether it was satisfied that all monies had been used for approved purposes and had not leaked to those who pursue illegal practices. DOE told us that they were working with responsible community organisations, well known to the Department and to elected representatives. There was no evidence to suggest that any money had leaked to paramilitary organisations. The Department added that three independent evaluations of the initiative had been positive in terms of the effectiveness of the impact which the Teams had made.
|
| |
| Qs 59, 60 and 80-87.
| 15. In one project the initial approval for funding was for £79,000 but a total of £314,000 was paid out. It is not clear if this additional expenditure had been properly authorised and the matter is under investigation. DOE told us it was satisfied that the bulk of the money had been sensibly spent on legitimate activities, but approximately £70,000 had not been used and attempts were being made to gain access to it.
|
| |
C&AG(NI)'s Report, para 6.3
Qs 76-79
| 16. In 13 projects examined by NIAO, no Letter of Offer had been issued to specify the use to be made of the grant. In a further five cases grant was released before any Letters of Offer had been issued or accepted. In the majority of letters there was no specific clause to cover inspection rights for the Department or audit should they wish to pursue any enquiries as to how grant was used. We asked DOE for assurances that the Northern Ireland Audit Office now had access rights to all relevant areas. We were told that a clause will be inserted in all Letters of Offer in future. The wording is being worked out with solicitors and will be a matter for consultation with NIAO.
|
| |
| Qs 6-8 and 112-113
| 17. The Department accepted that there were serious deficiencies in the arrangements for appraising schemes, for monitoring performance, for evaluating performance and for monitoring what was going on generally. We were told that they had recognised the deficiencies and have been progressively tightening all the arrangements since 1994. On the basis of an audit review carried out in February 1996, the Department said it was satisfied that the arrangements now in place were appropriate and adequate for the control of public money. Nevertheless, in view of the fact that the problems reported by the Comptroller and Auditor General had been identified from a sample of 98 projects, we consider that it would be in the Department's interests to carry out a wider review in order to assess the full extent of the problems.
|
| |
| Conclusions |
| |
| 18. We are astonished that more was not done to learn from the experience gained in administering similar community development schemes elsewhere. Previous evaluations point up precisely the weaknesses identified in this report and we feel strongly that a lot of what has gone wrong could have been avoided by taking account of established best practice. We agree with the Comptroller and Auditor General that the lack of comprehensive guidance and training for staff is likely to have contributed to the poor control, bad practice and inconsistency in approach highlighted in the audit findings.
|
| |
| 19. We are concerned that investment appraisal procedures were ignored in such an alarming proportion of cases and note DOE's assurances that adequate arrangements are now in place to appraise all projects.
|
| |
| 20. We find it unsatisfactory that the Department did not address the consultants' recommendations in 1991 to establish proper management information and monitoring procedures. We understand the experimental nature of the programme |nflsh|C&AG's |nflsh|Confidential |nflsh|Memorandumand the need to allow staff to use their initiative but that is all the more reason why there should have been sufficient monitoring to ensure that public money was being handled properly.
|
| |
| 21. We find it disturbing that, in a scheme which was giving out public money to a wide range of innovative and risky projects, there was inadequate staffing for the task.
|
| |
| 22. We note the Department's view that it was working with responsible community organisations and that there was no evidence to suggest that any money had leaked to paramilitary organisations. Nevertheless, we consider that the absence of proper controls over the issue and use of public money, has left the Department in no position to give us the degree of assurance that we would want on this point.
|
| |
| 23. We consider it essential that Letters of Offer for grant should provide full access rights for the Department and NIAO. We note that an appropriate clause is to be inserted in all future Letters of Offer and we expect to be informed if there are any problems in arranging this provision.
|
| |
| 24. We are very concerned that so many serious administrative deficiencies were found in a sample of 98 projects and consider that the Department should carry out a wider review of projects to assess the full extent of the problems.
|
| |
| 25. We recognise that Action Teams were dealing with some very disadvantaged communities in very tense security and political situations. Nevertheless, we must take the view that high standards of administration are required to safeguard public money and we expect the same high standards to apply in all parts of the United Kingdom.
|
