National Audit Office head Gareth Davies has told MPs that it has become “clear” that the public-spending watchdog cannot do its work effectively without some element of face-to-face working.
Davies said he was relieved that the organisation had not rushed into pandemic-time decisions about how its operations might work in the future, and that he detected a growing back-to-the office trend.
However, the NAO boss acknowledged that audit staff may spend less time working onsite with organisations whose accounts are being examined than was previously the case.
Davies’s observations on remote working came at a session of parliament’s Public Accounts Commission, the body that oversees the NAO’s work. He was asked if the “appropriate balance” between on-site and remote working had been achieved.
“We’re getting there,” he replied. “We used to send teams for weeks on end to sit at the Ministry of Defence to do the field work.
“We now take roughly half that time onsite that we did before and we think we’re getting all of the value from being there for that time, and it’s obviously much cheaper as well. So it’s an efficient way of doing it.”
Davies said he believed the pandemic would result in long-term changes to the way audits are conducted, but that an onsite element needed to remain.
“You need face-to-face time, just being part of the office environment that you’re auditing,” he said.
“And, crucially, the relationships you build up with the people who are making the judgments in the accounts – so the finance team, the audit committee.
“All of our experience was in the first year, and maybe two, of the pandemic you were trading on existing relationships. And that was OK, but they quickly deteriorate. And any change and you don’t have that relationship with the new people.
“We’re insisting on face-to-face meetings to set up the work, to sign off the key stages and to meet the audit committee.”
Davies said it had been evident that no long-term decisions about the NAO’s future property requirements should be made during the “heat of the pandemic”.
“We needed to wait, and I’m glad we did that, actually,” he said. “We are now much clearer that we’re not a remote-working organisation. We need to have people together.
“There was a risk a year or so ago of organisations concluding prematurely that they were going to work remotely for a significant amount of time and dispensing with a lot of office space, and boxing themselves into a strategy that they might now be regretting. Because I detect, generally, a shift back to having people in the office.”
Davies added that staff training had suffered during the pandemic, particularly for new recruits.
DWP could escape 34-year tradition of annual fraud-and-error rap
Davies also told MPs he believed it was possible for the Department for Work and Pensions to break out of a three-decade-plus pattern of having its annual report and accounts qualified because of unacceptably high fraud and error levels.
This year DWP declared a record high £8.5bn in fraud and error losses, which saw its accounts qualified for the 34th consecutive year. Last month, members of parliament’s Public Accounts Committee accused the department of lacking a plan to get to grips with the issue.
Davies told this morning’s Public Accounts Commission session that the NAO was working with the department on its investment in improving controls to bring fraud and error losses down to acceptable levels. He said the point at which DWP’s investment was considered to be sufficient would be an important step away from its accounts being qualified.
“We were developing what I thought was a promising approach on that, and then the pandemic hit and everyone had other priorities,” he said.
“We’re now getting back to that agenda, to say if the department can show us the improvements it’s making, the level of control that that’s increasing and therefore the reductions in fraud and error, then, at an appropriate point, when the levels have come down sufficiently, we’ll be able to lift that qualification.
“Clearly at that point, there would still be a level left – although one that you could deem would be the economic controllable amount. To keep on pouring money into the controls eventually becomes uneconomic.”