Conclusions and recommendations
1. Northern
Ireland Departments are continuing to attract an unacceptably
high level of negative audit opinions. (Paragraph 4)
2. We remain concerned
about the rigour of financial management in Northern Ireland departments.
The guidance offered by the Department of Finance and Personnel
(DFP) to departments appears to have been ineffective at a time
when resource accounting was being introduced and strong central
guidance would have been particularly useful. We expect the DFP
and departments to learn from this experience, and for the DFP
to provide more focussed and effective leadership in future. It
must be a clear priority for Northern Ireland departments to reduce
the present level of negative audit opinions significantly. (Paragraph
7)
3. The Committee welcomes
the action taken by departments to address the weaknesses in financial
management. However, we are concerned that the extended timetable
for the Accounting Services Programme will mean that the deadlines
for 'faster closing' and WGA are unlikely to be met by Northern
Ireland departments, and that this will impede action to reduce
the level of negative audit opinions. Meeting the 'faster closing'
and WGA deadlines is extremely important, and we strongly recommend
that the government ensures that these are met from 2006 onwards.
(Paragraph 11)
4. Departments have
failed to apply the existing rules on contracts and may have lost
the opportunity to secure annual savings of £2 million as
a consequence. Such laxity in procurement practice is unacceptable
and there must be no repetition. The development of revised guidance
for departments on the use of consultants is welcome. But revised
guidance alone will not be sufficient. Departments need to be
reminded forcibly of the need to act in accordance with the guidance,
and without the proper training of staff and their commitment
to implement the guidance, improvement is unlikely. In its response
to this report we expect the government to set out in detail how
it is addressing these issues. We expect the Department to meet
its target of the end of 2004 for the issue of new consultancy
guidelines. (Paragraph 15)
5. The Department
for Social Development needs to make a sustained effort to improve
its financial control over the grants, benefits and payments for
which it is responsible. This should go some way to addressing
the causes of its unacceptably poor audit qualification record.
In its response to this report, we expect the government to set
out clear and measurable milestones for the Department to achieve
a clear audit opinion. (Paragraph 19)
6. It is alarming
that the Department excused losses amounting to 7.6% of total
benefits expenditure in 2002-03 as the product of "a very
difficult set of schemes to administer". This response suggested
to us that the Department lacks a clear strategy for reducing
these losses. (Paragraph 20)
7. The Department
appears unable to maintain reductions in fraud and error across
all benefits year-on-year. (Paragraph 22)
8. Fraud and error
levels are unacceptably high and senior officials in the Department
for Social Development have not conveyed the sense of urgency
that these matters clearly warrant. We are disappointed that the
Department's efforts to improve performance have not resulted
in significant improvements. We expect the government to put in
place effective measures to ensure that the present unacceptable
haemorrhage of public funds is stemmed. (Paragraph 23)
9. Action is needed
to rectify unacceptable delays to the Child Support Agency's new
integrated computer and telephony system (CS2) which is preventing
the effective administration of benefits. In addition, cases administered
under the old system must be transferred to the new system as
soon as possible. This can only happen when the technical problems
currently plaguing the new system have been solved. In its response
to this report, we expect the government to set out clearly what
specific steps are being taken to address these problems, and
in particular by when they expect the Department to have transferred
all Child Support Agency cases to the new system. (Paragraph
26)
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