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 between March 2003 and February 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:

Areas of Special Scientific Interest (Report published 27 March 2003 – HC 499)

• NIAO’s 2003 report examined the arrangements operated by Environment and Heritage Service for establishing and protecting Areas of Special Scientific Interest (ASSIs). In particular, it explored the processes in place for identifying and designating relevant sites as ASSIs, for managing and protecting them after designation, and the quality of service delivered by those charged with their protection.
• The current report outlines: progress made by EHS in completing the programme of ASSI designation; improvements in arrangements for managing and monitoring the sites over time; and action taken against those who have not complied with prescribed management conditions.

Background briefing can be obtained by contacting Eddie Bradley (028 9025 1011) or Ursula Moyna (028 9025 1010).

On the Investigation of Suspected Fraud in Water Service (Report published 28 June 2003 – HC735)

• NIAO’s 2003 report examined investigations by Water Service into two suspected frauds, one where there was an allegation by a Water Service employee of fraud and impropriety and one where there were allegations of impropriety by a contractor. In the first case investigations indicated that a contractor was overpaid by almost £100,000. In the second case the investigation uncovered examples of working practices which seemed to indicate that the complainant’s allegations did have some foundation. In both cases the report highlighted concerns about the manner in which the investigations were handled.
• The current report updates how Water Service has dealt with the recovery of overpayments; ensuring the propriety of expenditure; the handling of fraud investigations; combating fraud; the Water Service employee; and the handling of NIAO requests for information.

Background briefing can be obtained from NIAO by contacting Ciaran Moore (028 9025 1128) or Patrick O’Neill (028 9025 1023).

On Encouraging Take-up of Benefits by Pensioners (Report published 3 July 2003 – HC 737)

• In 2003, the C&AG concluded that, while the Department for Social Development and its agencies had made good progress in encouraging eligible pensioners to claim their benefit entitlements, he was concerned that many older people were still struggling to make ends meet. For example, according to estimates at that time, up to 36,000 potentially eligible pensioners failed to apply for the Minimum Income Guarantee leaving millions of pounds lying unclaimed.
• To determine the progress made since the C&AG’s report, the Department was asked a number of questions, including the action it had taken on improving the reliability of data on levels of non take-up; setting targets to increase take-up; simplifying the benefits claims process; targeting potentially eligible pensioners; facilitating the exchange of information between agencies; and measuring the costs and benefits of take-up campaigns.

Background briefing can be obtained from NIAO by contacting Barry Edgar (028 9025 1122) or Sean Beattie (028 9025 1091).

On the Private Finance Initiative: A Review of the Funding and Management of Three Projects in the Health Sector (Report published 5 February 2004 – HC 205)

• NIAO’s review examined the provision, through the Private Finance Initiative (PFI), of a car park at the Royal Group of Hospitals; contract energy services for Homefirst Community Trust at Holywell Hospital; and renal services for the United Hospitals Health and Social Services Trust at Antrim Area Hospital. These were small projects in PFI terms, undertaken in line with prevailing policy at that time and without the benefit of the extensive guidance notes developed since then.
• The current review looks at how the best practice and lessons drawn out of the 2004 report have been taken forward. These include steps to minimise transaction costs in PFI projects; improving procedures for the appointment and monitoring of advisors and consultants; progress in re-negotiating the contract for the provision of car-parking at the Royal Hospitals; and the arrangements for carrying out and disseminating lessons from post-project evaluations.

Background briefing can be obtained by contacting Barry Edgar (02890251122) or Brandon McMaster (028 9025 1077).

On De Lorean: The recovery of Public Funds (Report published 12 February 2004, HC287)

• Following the demise of the De Lorean car project in 1982, Government embarked on a wide range of actions in a bid to recover public funds lost in the project. One of the major areas on which our report focused was the Department’s litigation against Arthur Andersen, the De Lorean companies’ auditors. Over 12 years after was the action was initiated, it was settled for £20.72 million. Against this, however, the Department had incurred direct legal costs of £20.32 million, together with substantial administrative and in-house legal costs which could not be quantified.
• The current report reviews how the lessons arising from the Andersen case have been adopted within the Department’s operating procedures. Areas examined include the need for formal, independent reviews of the strengths and weaknesses of a case at appropriate stages throughout the litigation; and procedures to ensure that the level of costs is regularly assessed against the aims of the action and the likely damages.