Transcript Helping the nation spend wisely

Increasing the relevance of SAIs in the
21st Century – the experience of the UK
National Audit Office
Martin Sinclair – Executive Leader
Nick Lacy – Head of Policy & Legal
Tuesday 17 June 2014
Round 2 workshop
Increasing the relevance of SAIs in the 21st Century
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If your audit Office was a football team
what type of team would it be and
why?
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Context
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Across the EU governments continue to face a
climate of austerity and rising demands for public
services. All public bodies are having to rethink
fundamentally how they operate.
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SAIs have an important role to play in
safeguarding public money, ensuring
transparency and accountability in the use of
public funds, upholding proper standards of
conduct in the provision of public services and
helping achieve value for money.
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With open data how can SAIs use their
professional knowledge and insight to
add value?
UK austerity programme: public sector environment
continues to change in the context of austerity and
cost reduction and as a result of the UK
government’s reform agenda.
Cost reduction: Protection to some budgets such as
health, education and overseas aid - requires greater
reductions in other areas, for example local
government and policing. The financial constraints
combined with rising demand present real risks to
financial sustainability.
Societal change: how to maintain and increase the
relevance of SAIs as an interpreter of data in the
world of changing demographics, open data, the rise
of the ‘armchair auditor’. This raises questions about
how we manage our people and places a sharper
focus on the relevancy of our work for the public,
Parliament and wider stakeholders.
Increasing the relevance of SAIs in the 21st Century
This workshop provides a forum:
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to explore how SAIs have innovated in response
to the changing environment;
to discuss key opportunities and challenges
for SAIs
to explore how SAIs have responded to show
their relevance to their stakeholders
and to provide insight into the complex issues of
the day.
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We recognised that we needed to change
Both play football which one adds more value?
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Brazil were a great team – why?
Perhaps the lasting appeal of this Brazil team is linked to new
technology at the time which allowed the 1970 World Cup to be
beamed around the globe in colour – allowing viewers a first glimpse
of the iconic yellow shirt.
It was the first global World Cup. People sat in front of the
television and watched it properly. Few remember 1962 and outside
of England most don't really remember 1966!
It was easier for people to see it. Open football?
Outcome – they won with style
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The NAO’s Transformation Programme
Transformation programme launched in 2013 to achieve a significant increase in
our contribution to improving public services - ‘better to transform than to be
transformed’
Why ?
• Austerity
• Structural challenges for government (social welfare budget, smaller state,
citizen centric state, internet penetration, digital, public services akin to private
sector)
• Demographics of our people (shorter careers at NAO, wider skills, digitally
connected)
• An SAI cannot just be about producing audit certificates and reports it needs to
add value…………
The transformation programme has put us in a better position to deliver sustained
value to those we audit, and improved assurance to Parliament by:
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identifying risks and weaknesses
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patterns and systemic issues risks and
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be more forward looking.
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What have we done?
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Work that adds value to the traditional role of audit
to hold public bodies to account by:
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Focused our work on the strategic issues facing
government to develop deep expertise on the
strategic challenges facing government
Improved our insight into our clients business
Adopted an integrated audit approach delivered
through a broader range of outputs to provide more
expert, proportionate and integrated assurance
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People: Restructured our audit teams into groups
so we are more efficient & developed the skills and
expertise of our people (examples in investigations,
in data analysis, in commercial expertise see work
on Royal Mail –
http://www.nao.org.uk/report/privatisation-of-royalmail-plc/)
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Efficiency: Made use of technology to reduced our
costs to make financial savings and become more
data led
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How does our work add value?
Influence change
in the department
Interventions are used to maximise
our impact and add value
Holds the
Department to
account
Build
expertise
Influence
stakeholders
Evidence-based assurance
informed by our client insight
Operational plan
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Our work is more relevant, responsive and in depth
Our work meets the test of supporting Parliament
by holding departments to account and is focused
on adding value by intervening earlier to prevent
failures from escalating.
By providing assurance earlier in the lifecycle of a project
or programme we can limit the impact of administrative
failures, preventing them from increasing into significant
value for money failures, or highlighting risks that need to
be managed. For example, we have reported early on the
business case for the High Speed 2 rail line, and on the
implementation of Universal Credit, a key element of the
government’s welfare reforms.
Is it externally focused for example we have
strengthening our investigative capability to report on
emerging risks and respond to public concerns.
We have completed 13 investigations and have further
16 underway, or about to commence), including
Confidentiality Clauses –a topic that wouldn’t ordinarily
have been looked at, it was delivered at pace and has
opened a broader debate about the use of such clauses –
and their link with whistleblowing.
Increasing the relevance of SAIs in the 21st Century
More work cutting across traditional boundaries
for example
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A programme of work to look at how to deliver better
services through digital channels such as HMRC and
DWP’s progress in transforming their operations to
digital services.
Work on contractors: using the skills across the NAO
on a topic of high public interest, communicating
clear messages about how improvements can be
secured which the Public Accounts Committee can
draw upon and departments implement
Working on a range of comparative work : for
example on commissioning of services in detailed
comparisons within and across sectors such as
health, local government. Also on the financial
sustainability of local authorities, including the effect
of the reduced funding on local authority service
levels, how this varies across local authorities and
the implications for service users.
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We have reorganised so our work is focused on the strategic
issues facing government
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What does the transformation programme mean for our audit
teams and how they work together?
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Structures - each audit group has an integrated
plan with a wider mix of assurance, focusing
on common themes and strategic issues for
example
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Against the background of difficulties with a
number of contracts for outsourced services
(such as for asylum seeker accommodation,
interpreter services in courts and the electronic
tagging of offenders) this year we are examining
the progress made by departments (the Home
Office and Ministry of Justice) in strengthening
their ability to manage the work of providers.
The study is being conducted in parallel with
other NAO work on contract management
across central government, including Cabinet
Office and the Crown Commercial Service.
Also reports on managing government suppliers
and the role of major contractors in public
service delivery have broke new ground
regarding the transparency of private sector
service delivery by placing information on
supplier revenues and the profitability of
contracts into the public domain for the first
time.
Increasing the relevance of SAIs in the 21st Century
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Financial Savings - savings have been achieved
under transformation (£1.3m in 2013-14, and £2.5
million in 2014-15) staff changes, voluntary exit
programme in 2013.
Staff Engagement/ Culture - and new ways of
working with an in depth sector knowledge and
expertise, financial, VFM and investigations but audit
remains the core audit skill
Processes - shift towards a ‘business partnership
model’ for corporate services
Building skills: Audit groups have dedicated
Directors, e.g. people DIRs/ knowledge and
influence Directors. Different ways of working.
Communities of practice. New people in.
Greater impact through audit which adds value
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The NAO’s transformation programme is closely linked to some of
the principles outlined in ISSAI 12 - making a difference to the lives
of citizens
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Strengthening the accountability, transparency
and integrity of government and public sector
entities
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Principle 1: Safeguarding the independence
of SAIs
Principle 2: Carrying out audits to ensure that
government and public sector entities are
held accountable for their stewardship over,
and use of, public resources
Principle 3: Enabling those charged with public
sector governance to discharge their
responsibilities in responding to audit findings
and recommendations and taking appropriate
corrective action
Principle 4: Reporting on audit results
and thereby enabling the public to hold
government and public sector entities
accountable
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Demonstrating ongoing relevance to citizens,
Parliament and other stakeholders
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Being a model organisation through leading
by example
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Increasing the relevance of SAIs in the 21st Century
Principle 5: Being responsive to changing
environments and emerging risks
Principle 6: Communicating effectively with
stakeholders
Principle 7: Being a credible source of
independent and objective insight and
guidance to support beneficial change in the
public sector
Principle 8: Ensuring appropriate transparency
and accountability of SAIs
Principle 9: Ensuring good governance of SAIs
Principle 10: Complying with the SAI’s Code
of Ethics
Principle 11: Striving for service excellence
and quality
Principle 12: Capacity building through
promoting learning and knowledge sharing
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Our objectives remain the same
Supporting Parliament to hold entities to account
to increase our influence on the key challenges faced by government
and the way that policies are implemented;
to develop and apply our knowledge by building our expertise and
focusing on the strategic issues that public bodies face; and
to deliver high performance by transforming the NAO and practising
what we preach.
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What is different?
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Workshop exercise: UK NAO
• The workshop: break into four groups to consider some high level
questions (20 minutes)
• Nominate a Rapporteur for each group
• Report back on the key issues identified in your group to the rest of
the workshop group for wider discussion (5 minutes each group)
• Provide a summary for the later plenary sessions (15 mins)
• Any questions?
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Workshop exercise: UK NAO
• Key questions to consider in your group discussion:
• Impacts: How can SAIs develop to add more value and
optimise the benefits from audit?
• People: How can SAIs increase influence with key stakeholders
by showing awareness of the issues they face?
• Fit for purpose: How can SAIs be more efficient, by adopting
modern business practices (time, cost and quality – right
subject at the right time)?
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