‘Timing your intervention is part of the art’ – NAO head Gareth Davies on the role of auditors in ensuring value for money in government
The head of the National Audit Office has set out his priorities for the role in an exclusive interview with The Civil Service World Podcast
Brexit is changing the way government works and the National Audit Office is having to respond to ensure it keeps up, the comptroller and auditor general Gareth Davies has told Civil Service World.
In an interview with The Civil Service World Podcast, Davies, who took up post in June, set out his plans for the organisation, which audits government departments and agencies. This has included launching a strategic review of the NAO that will be informed by its work around Brexit, with NAO discussing possible changes internally as well as "with the departments and organisations we audit, people with an interest in the work of the NAO from outside”.
Brexit is “changing government”, he said, and has led the NAO to adapt its approach to match the changing workflows of departments.
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“Lots of permanent secretaries have reflected on the fact that this whole exercise has achieved a significant amount of cross government working, sharing of staff and sharing of information,” Davies said. “So in return, of course, the NAO approach has had to adapt to that way of government working.
The shift to cross-government working to specific deadlines set for Brexit is “quite a challenge for auditors who are used to a target that's not moving necessarily”, he said, explaining that NAO teams have worked on real-time evaluations of many Brexit projects.
Such evaluations of ongoing policy implementation “doesn't work for everything”, Davies said, but “where it is needed, it's important to be able to do it confidently and without compromising your independence”.
Maintaining audit independence is important “because when the auditor becomes part of the management process, it becomes very difficult to audit that process later. So staying on the right side of the line while also producing constructive work is part of the challenge.”
When to intervene
Understanding where interventions can be best made in government projects is a key part of his work, he said.
“If all you're doing is reporting past failures, that's got a value, but only a limited value,” he said. “And so I really welcome the fact that NAO has as in recent years been moving upstream.”
The work around Brexit has helped further catalyse this shift, with the NAO looking into projects that have been working to the UK’s planned exit dates first in March and then October, and with the departure from the EU now set for 31 January.
“So a significant number of people across the NAO have now had experience of carrying out work whilst the project is in progress and before it's delivered its intended outcomes, and using that real time auditing to feed in results as they are emerging, with the intention of plugging gaps before they become a problem.”
One example is a NAO investigation into planning for the supply of medicines and other clinical goods in the event of a no-deal Brexit, undertaken with both the Department of Health and Social Care and the Department of Transport, which was done in real time.
“The feedback from the department was that, of course, this took some effort on their part to allow us to gather the information we needed for that work, but in return, they did get a valuable reflection of where there was still more work to be done and, did adjust their work programmes in response. That's audit at its best, I think.”
When to intervene is particularly crucial on long running major projects in government, Davies said, such as infrastructure schemes like Crossrail or the forthcoming renewal of parliament.
“I think actually timing your interventions when it's going to be of value is part of the art on these long projects,” he said. “And I don't think any auditor would claim they'd always got that right, in hindsight.
“That's why on the restoration and renewal of Parliament project, we're keen to get in very early, so that it isn't another example where you're saying ‘it's a shame you didn't apply the lessons in scoping this or pricing it or de risking it’, and so on. Getting the timing right is crucial, and the value that you can add as an auditor on a major project is pretty significant if you get that right, because, by definition, there's time to make an impact on what happens next. Sometimes on a short piece of work, the only possible way of auditing it is after it's completed. At that point it's a purely retrospective process.”
Davies worked as UK head of public services for international audit firm Mazars from 2012 until joining the NAO, and before Mazars he was managing director of the audit practice at the Audit Commission, and spent a total of 25 years at the watchdog.
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