Tuesday 22 January 2013

Auditing and re-auditing

All of those involved in spending public money have a responsibility for ensuring that it is spent cost effectively and in accordance with the organisations' agreed aims and objectives.  That is as it should be, and it means that all public bodies have agreed internal and external audit processes to verify that it actually happens.

Sometimes, however, the fragmented nature of Wales’ governmental structures means that the same activities can, effectively, be audited multiple times at multiple levels.  European funding is one example which leaps to mind.
The EU of course has its own processes for verifying that money has been spent in accordance with the terms of any grants given.  And that includes the money coming to Wales under the Convergence scheme.
As a result of an attempt by the One Wales government to appear to be more strategic in its approach – which seems to have convinced the ministers but I doubt that they convinced anyone else – an extra layer of funding 'bodies' or consortia was effectively introduced; and the Welsh government audits the way the money it allocates to those funding bodies is spent.
Those bodies in turn audit the way in which the money is spent by the bodies to which it is allocated by them.  Many of those are local authorities, who again have their own audit processes.
So some European funding is being audited at least four times as it passes through different levels of public authority.  That inevitably means that less money and effort are spent on the direct activities concerned.  Even if the audit costs come out of “other” funding rather than out of the grant funding itself, it still means that money is being used to check what is being done and how rather than actually doing something.
At each level, the argument is the same – “we’re dealing with public money, and have to demonstrate that the doing it properly” – and each level has to assemble, collate, and file its evidence of what has actually been done and how.
Now if “Public Sector Wales” was a single unified structure, would we still want or need to audit the same things several times at different levels or would a unified body have just a single set of audit processes?  Could we – and would we – be able to divert more resources into doing things instead of checking up on what other people are doing?
I’m not arguing here for creating a unified structure for the Welsh public services (although the idea is not without some merit).  There is, though, an argument for looking at a single unified audit structure and process for the Welsh public sector, which means that any activity is only subject to a single audit, and that other bodies then accept the veracity of what they’re being told rather than re-check.  Excessive trust can certainly bring problems of its own; but excessive distrust is costing us time and money which could be more usefully deployed elsewhere.

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