Examination of Witnesses (Questions 20-34)
Monday 23 February 2004
Mr John Dowdall CB, and Mr John Savage
Q20 Mr Bacon: £10 billion is the
total spend in Northern Ireland, is that right?
Mr Dowdall: About that.
Q21 Mr Bacon: It is a sufficiently small
sum of money compared with GB, one would hope it would be pretty
easy to get one's head round it more thoroughly. Do you think
that is fair?
Mr Dowdall: I do think it is fair.
Northern Ireland is a very coherent public administration system,
it is relatively easy for me. I think I have a good feel for what
is going on in that system through the audits that I do. The penalty
we impose on ourselves in Northern Ireland despite the neat £10
billion figure is that it is disastrously fragmented and Government
has enormous layers within that. Almost every body in GB that
carries out any function of government is duplicated on a tiny
scale within Northern Ireland and that is an impediment to clarity
and an enormous inefficiency.
Q22 Mr Bacon: The Sheep Annual Premium
Scheme was one of the most entertaining and spectacular reports
we have ever read. What was it that caused the Department for
Agriculture in Northern Ireland to be able to do that for such
a long time without it becoming rapidly apparent, was it a lack
of clarity or layers or what was it?
Mr Dowdall: I do not think it
was lack of clarity. I think the Chairman had it right with that
case where he said there is a tendency for all Departments for
Agriculture to become captive by their clients. In many ways I
think you are really asking me why we did not get into that system
sooner. I think the answer is that we were on to plenty of other
things in the Department for Agriculture, we cannot do everything.
The devolved PAC that was doing your work for a couple of years
before you had several important and equally significant issues
from the Department for Agriculture which it had to deal with,
it was just a matter of when we got round to that particular report.
Fraud in agriculture had been a big theme of our work for some
years before that.
Q23 Mr Jenkins: You mentioned that the
local authority audits were ultimately your remit and, therefore,
the total cost would not be 10% but 2.9%. All I want to ask is
who paid for the health audit and who paid for the local authority
audit before you did?
Mr Dowdall: They are paid for,
as they have always been paid for, by the local government. An
audit fee would be levied on local authorities and the money will
be transferred into me. The health audit will be paid for by the
health boards under that rather old-fashioned system Sir John
was explaining in his case and that will be transferred into me.
It all has to be accounted for in my estimate.
Q24 Mr Jenkins: When it comes in, this
is total spend, and therefore the increase in total spend is 2.9%,
if it is an extraordinary 2.9%, way above the rate of inflation,
why am I not looking for economies of scale? If I am going to
merge them all together I should be talking about reducing the
cost of an audit rather than increasing it.
Mr Dowdall: That is what I would
expect the PAC to ask. I think you are getting economies even
in that 2.9% figure, which is the lowest increase we have ever
requested. That is only the first stage of it. There are substantial
economies to be got out of these arrangements. Allowing for the
fact that we are also probably going to have to put some more
resources in to raise the quality of health that there has not
been in the past. We will be a larger office, we will have more
staff, we will be able to manage those efficiently and that will
be in the request that I ask for.
Q25 Mr Jenkins: Work will expand rather
than getting the costs down to a zero increase next year.
Mr Dowdall: If I can get the costs
down to zero increase next year, if not I will justify every per
cent.
Q26 Mr Jenkins: That might be of some
interest. We all know that the Assembly is suspended, you assume
that it is going to be restored in 2004-05 if it is not what are
the consequences for you, will it cost any more? Will you be able
to operate effectively or do you look forward to coming across
here to us on a regular basis?
Mr Dowdall: I would always be
happy to come across here but I would much rather have my own
Assembly to work to in Northern Ireland. The truth is that the
basic work goes on whether I am working to Westminster or working
to the Assembly, I have to audit the same number of accounts every
year, that is 60% of my budget. I have to produce ten or so value—for-money
studies to give you a selection here or to run a full programme
there. The difference is that when the Assembly is fully in operation
a lot of our time is taken up interacting with Assembly Members
whereas naturally I do not take up very much of your time over
here. That is a senior management burden more than anything else.
I think if we are permanently bound into a Westminster situation
in the long run that will have implications for the numbers and
workload in our senior management but not for the basic financial
audit work.
Q27 Mr Jenkins: So there will be no reduction
in the costs again?
Mr Dowdall: I do not think so.
Q28 Mr Jenkins: On the quality of your
reports, in your report you say, quite rightly, it is measured
by rigorous internal and external quality reviews of the work.
Are the results of the external assessments made public?
Mr Dowdall: No, they are not.
There are two types of external assessment, one on the financial
audit, which Sir John does for me, that is quality review on the
financial audit, not very interesting as long as it is up to an
acceptable standard. The other is the marks I get for my value
for money reports. Rather like Sir John's from the LSE, I get
them from a local panel of ex-accounting officers.
Q29 Mr Bacon: Have you thought of getting
them from the LSE instead?
Mr Dowdall: I think I like the
system of using ex-accounting officers rather than academics.
Q30 Mr Jenkins: I bet you do because
the results are quite remarkable. On a scale of one to five I
think every report achieved three or more. Is three or more good,
bad, indifferent?
Mr Dowdall: Three is acceptable,
five is excellent. I think on the whole it would not be very different
from the kind of ratings Sir John gets from the LSE. I have not
actually published those before but there is no reason why not.
We do list those reports on our website and I would be quite happy
to put the panel marks on to that as well. Let me say a panel
of ex-accounting officers is not exactly a sympathetic panel to
us as auditors; nor are they as detached as academics who may
have a slightly different perspective to bring to things. It is
a tough appraisal system.
Q31 Mr Jenkins: The point is if it is
not made public other members of the public cannot see the opinions
and, therefore, they feel a little isolated and they will think
"they are all the same, it is not such a good department
after all" and they can rally round and be more critical
about it. On your financial audits, how do you know you achieve
honest feedback from your customers insofar as they are pretty
well prisoners of yours, are they not? Are they going to be very
honest with you?
Mr Dowdall: First of all, I do
not even call them my customers, they are my auditees. You are
my customer, you pay me. As for honest feedback, you obviously
have a short memory about dealing with permanent secretaries.
They have no difficulty in giving very sharp feedback if they
feel they are not being fairly treated. In a small system like
Northern Ireland I know all of the permanent secretaries on a
personal basis and they will, and do, give me very sharp feedback
if they feel they are not getting fair treatment from us.
Q32 Mr Jenkins: So you have never had
the comment ever that they would have preferred external auditors
to yourselves?
Mr Dowdall: I am sure they would
prefer an external auditor to myself but, as Sir John said, that
would break the link with Parliament. That might well be one of
the reasons why they would prefer it.
Mr Jenkins: Very true.
Q33 Chairman: One last question on religious
affiliation. This is a Northern Ireland question. Table 5.2 of
the Corporate Plan shows 56% of the workforce is Protestant, 41%
Roman Catholic. Is that still right?
Mr Dowdall: Those were the latest
figures we had.
Q34 Chairman: Is this pattern reflected
all the way through your organisation from bottom to top?
Mr Dowdall: No, I would not say
so. I think like much of the rest of the public sector in Northern
Ireland equality practices have been working their way up to the
top but I do not have the figures to hand. I can let you know
the break down in what we call our senior management, say audit
manager and above.[1]
Chairman: Any more questions? Thank you
very much, Mr Dowdall, Mr Savage. I am sorry we kept you so long.
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