Garbage in, garbage out?
We are in the first week of this brave New World of government transparency about its spending.
I have downloaded the spreadsheet, almost giving my steam-powered PC a heart attack, and played around with it. I’m not happy at all.
I kept asking myself whether all these lines of data were proof once again of the old adage: ‘grabage in, garbage out.’ The first question any auditor needs to ask themself is this: ‘Is this data from a reliable source?’ How do we know? How can we find out?
The National Audit Office (NAO) is responsible for auditing the accounts of central government departments. The NAO audit opinions will tell us something about the quality of the financial systems that produce the raw spending data we’ve been given.
What’s the score then for 2009/10 accounts? It’s difficult to tell. The NAO website may make sense to someone in the system but from the outside it’s incredibly hard to get anything about audit opinions out without a trawl through the news release archive.
Maybe I’ve missed something but perhaps the powers that be might consider a table somewhere prominent on the site that shows each department and gives their audit opinion status. Just a thought. The Comptroller and Auditor General (CAG) does produce an annual general report but you’ll see the latest one was published in February 2009 and covers the 2007/08 year.
Reassuringly 50 of the 56 sets of accounts audited by the NAO got unqualified audit opinions. Two of the six malefactors (DWP and MoD) feature on the bad-boy list again in 2009/10 along with Defra for the following reasons:
- Defra – qualified (regularity)
- DWP – qualified (Fraud and error)
- MoD – qualified (limitation of scope and asset valuation)
Hardly inspiring is it?
More important from a value for money perspective is what the NAO has to say about the effectiveness of financial management in government departments. Have a look at the NAO financial management in CLG report to get a flavour and remember this was the position over a year ago. Goodness knows what is happening now as budgets are cut and staff numbers reduced.
So what are the issues from all of this discussion for the armchair auditor?
Firstly, we have no easy way of knowing whether the underlying financial systems used to generate all this information are actually any good. We can infer from the NAO that they are for most departments but that’s not quite the same. There’s a further question too that even for the best systems the quality of the output is largely determined by the quality of the input.
The weaknesses in financial management reported by the NAO may explain why we are all struggling to make anything at all out of the data that has been released.
The second, and final point, I’d make is this. Everything I know from all the change programmes I have ever seen is that they generate financial management and governance headaches of huge dimensions. These need skilled and knowledgeable people to sort out. Just have a think about what the staffing cuts being put on the table mean for promoting sound financial management and through it VFM for us taxpayers.
Not a comforting thought is it?