Departmental Responses to Recommendations in NIAO Reports

15 June 2006

Departmental Responses to Recommendations in NIAO Reports

A report published today by John Dowdall, the Comptroller and Auditor General for Northern Ireland, examines the progress made by five Northern Ireland Departments on the recommendations made by the Northern Ireland Audit Office in a series of reports published in 2004.

Background

During devolution, reports published by the Audit Office were examined by the Northern Ireland Assembly’s Public Accounts Committee. In the absence of the Assembly, the Westminster Public Accounts Committee has been taking evidence on the main reports, but has not been able to include every report in its programme.

In order to ensure that Northern Ireland Departments formally respond to all Audit Office findings and recommendations, a new procedure has been introduced to deal with those reports which are not the subject of a PAC hearing. Under this procedure, the Audit Office writes to the Departments concerned setting out the main issues and asking for a formal, written response to questions about the progress made since the report was published.

This process is aimed at strengthening public accountability in Northern Ireland during suspension of the Assembly, by ensuring that follow-up is being properly actioned and monitored by Departments. The main issues arising in respect of the five Audit Office reports are as follows:

The Management of Surplus Land and Property in the Health Estate (Report published 26th February 2004 – HC 298)

Our Report concluded that the Department of Health, Social Services and Public Safety and Health and Social Services Trusts needed to take action to strengthen the management of the health estate in order to address over-capacity. While the tasks of identifying and selling surplus land and buildings are challenging, work is underway to address a number of issues. In particular, an Asset Management Review, due to report in June 2006, aims to provide for the independent challenge of the current case for use or retention of the component elements of the health estate and to ensure that all potential disposals are identified. Other outputs of this Review will be a complete and up-to-date stocktake of the estate and the establishment of appropriate disposal targets for Trusts.

Background briefing can be obtained from NIAO by contacting Barry Edgar (028 9025 1122) or Sean McKay (028 9025 1075).

Imagine Belfast (Report published 15th July 2004 – HC 826)

NIAO’s 2004 Report noted a number of key lessons which the Department should learn following its support of the unsuccessful bid to become European City of Culture 2008. These included the need for clearly defined roles and responsibilities, a realistic timetable, adequate resources and effective communication and co-ordination. It also highlighted some weak internal controls in the running of the Company itself, particularly in relation to documented financial procedures and segregation of duties.

In this Report, NIAO notes that the Department has introduced a Memorandum of Understanding between itself and organisations it may support in similar projects. This sets out clear roles and responsibilities, as well as details of resources, timetable and communication arrangements. In addition, it now draws up a “relationship document” with funded bodies, setting out the necessary internal controls and carries out regular assessments to ensure controls are being applied in practice.

Background briefing can be obtained from NIAO by contacting Barry Edgar (028 9025 1122) or Valerie Cairns (028 9025 1062).

Use of Consultants by Northern Ireland Government Departments (Report published 10 June 2004 – NIA 35/03 and HC 641)

NIAO’s 2004 report examined the extent to which guidance from the Department of Finance and Personnel (DFP) on the use of consultants was being applied by Government departments and whether there was scope to update the guidance to improve the purchasing of consultancy services. The examination also covered the quality of procurement processes within Northern Ireland departments and DFP’s monitoring role and responsibilities. The report concluded that there was considerable scope for departments to improve their procurement and management of consultancy services.

The current report reviews the actions taken by the Department of Finance and Personnel and other Government departments to address the issues raised by the 2004 report. These include the issuing of revised guidance by DFP, compliance by departments with DFP guidance and good practice and DFP’s monitoring of the use of consultants in Northern Ireland departments.

Background briefing can be obtained by contacting Eddie Bradley (028 9025 1011) or David Murdie (028 9025 1135).

Recoupment of Drainage Infrastructure Costs: Department of Agriculture and Rural Development (Report published 8 June 2004, HC 614)

The Department undertakes drainage infrastructure works to reduce the risk of flooding of property or neighbouring areas from future development. The cost of these schemes, at around £1 million each year, has been entirely borne by the taxpayer – developers benefiting from the schemes do not contribute. In June 1990, the Public Accounts Committee (PAC) noted that the Department was considering how to recover the costs of schemes, through agreements with developers. Our 2004 report highlighted that, for the 13 years since the PAC report, consideration on how to obtain contributions from developers had been ongoing, but remained unresolved. As a result, substantial sums of revenue had been lost to the public purse.

The current report provides an update of Department’s progress. In particular it notes the introduction of a statutory power to charge developers, the actions taken to identify a suitable charging methodology and consultations with key stakeholders. The Department anticipates the introduction of developer charging will result in an average recovery of around £1.2 million per annum.

Background briefing can be obtained by contacting Robert Hutcheson (028 90 251024) or Clare Dornan (028 90 251035).

Introducing Gas Central Heating in Housing Executive Homes (Report published 1 July 2004 – HC 725 Session 2003-04)

NIAO’s 2004 report examined the arrangements operated by the Northern Ireland Housing Executive (NIHE) for the award and implementation of gas heating contracts between 1997 and 2001. In particular, it explored: the decision to offer gas heating; NIHE’s management of the award of contracts, the installation process and maintenance arrangements; and the potential of new partnering contract arrangements to deliver value for money.

The current report outlines specific action taken by NIHE to implement general best practice recommendations and lessons emerging from the early gas contracts. These include: production of business cases, including risk assessments, for all major projects, and monitoring of achievement of key performance indicators at Project Board level; carrying out, and implementing, lessons emerging from, post-project evaluations; and revision of NIHE policies and procedures to prevent and detect fraud.