Report to the Northern Ireland Assembly by the Comptroller and Auditor General
The Comptroller and Auditor General, Kieran Donnelly, today publishes a review of the Agri-Food and Biosciences Institute (AFBI).
Mr Donnelly said: “I welcome that AFBI has delivered efficiency savings and increased its commercial income over recent years. However the Department of Agriculture and Rural Development, its sponsor department, cannot provide sufficient assurance that it is getting value for money for the £250 million funding it has provided from 2006 to 2011. AFBI does not know the unit costs of its scientific testing or how these compare with other organisations. Its research and development projects have significantly exceeded their budgets and have not been subject to sufficient appraisal, oversight and evaluation”.
- AFBI was established in 2006 and is a Non-Departmental Public Body of the Department of Agriculture and Rural Development’s (DARD’s).
- It undertakes scientific testing and Research and Development (R&D) work in agriculture; animal health and welfare; food; fisheries and forestry.
- DARD provided £253 million of assistance to AFBI between 2006-07 and 2011-12. During this period, AFBI also generated £68 million income from other government bodies and commercial customers
Financial and Performance management
- Since 2006, AFBI has delivered £3 million in efficiency savings and significantly increased its non-DARD income, from £6.3 million in 2006-07 to £16.8 million in 2011-12.
- However, there is scope for further efficiencies. AFBI spent £51 million on its estate between 2006-07 and 2010-11. A 2010 property asset strategy concluded that AFBI’s main site (Newforge) was past its expected life-span, wasteful of space and carbon and energy inefficient.
- Up to April 2011, AFBI used a historical rate (dating back to at least 2003) when charging commercial customers for work. AFBI may have lost £3.5 million income due to its failure to update its fees.
- In 2010-11, fees for £3.8 million of AFBI’s non-DARD work were agreed with clients `up-front’, based on estimated staff time required. However, AFBI has not verified the accuracy of these estimates, and the report concludes that inaccurate forecasting could result in significant under-charging.
Between 2006-07 and 2010-11, AFBI spent an estimated £143 million on scientific testing, mostly for DARD. A high percentage of tests have been delivered to required time-scales, and 99% currently meet ISO International Organization for Standardization. -accredited standards. However, there has only been limited unit costing (i.e. cost of carrying out each test) and comparison of costs with other providers. It is therefore unclear how DARD is assured that this testing is being delivered efficiently, and that it is receiving best value for its significant funding in this area.
Management of Research & Development Projects
- NIAO’s examination of 125 of AFBI’s research and development projects found indicators of poor management and control. Almost a third of projects should have been subject to full appraisal but were not; total costs were £12.7 million higher than initial estimates; cost overruns for 49 ongoing projects were particularly high (£11.6 million); and projects were not delivered to deadlines established at the outset. The cost overruns occurred against a background of a lack of project monitoring and review.
- DARD has now introduced new arrangements for planning, appraising, monitoring and evaluating R&D work procured from AFBI. However, it is too early to assess whether these have improved performance.
- The report highlights a potato breeding project which commenced in 1957, and which is still being funded despite the Westminster Public Accounts Committee reporting in 1995 that the Department needed to put “in place robust controls to prevent long-term research projects continuing indefinitely where they are not delivering results”.
- A number of individual DARD-funded R&D projects have delivered important financial benefits. However, Post Project Evaluations have not yet been completed for the majority of projects, and the overall impact from the wider research programme is unclear.
Governance and Oversight Arrangements
- Although DARD put in place oversight arrangements for AFBI when it was established in 2006, implementation of other governance structures was slow, and the development of a strong corporate governance framework has been a prolonged process.
- a formal and fully costed work programme was only introduced in 2010-11;
- there have been long-standing concerns around the quality of AFBI’s management information;
- DARD was unaware of the extent to which research and development projects were not being delivered within their original budgets.
- whilst DARD launched a strategy in June 2009 to ensure that R&D commissioned from AFBI fully supported its strategic objectives, initial projects were not approved until 2011-12. A simultaneous review of 79 ongoing R&D projects resulted in two-thirds being immediately terminated, and NIAO expresses concerns that many continued for prolonged periods without yielding substantive benefits.
Notes for Editors
- The Comptroller and Auditor General is Head of the Northern Ireland Audit Office (the Audit Office). He and the NIAO are totally independent of Government. He certifies the accounts of Government Departments and a range of other public sector bodies. He has statutory authority to report to the Assembly on the economy, efficiency and effectiveness with which departments and public bodies use their resources.
- This report is available on the Audit Office website at www.niauditoffice.gov.uk. The report is embargoed until 00.01 hrs on 12 September 2013.
- Background briefing can be obtained from the Audit Office by contacting Eddie Bradley (028 9025 1011) or Paul Turley (028 90251018).