11.       Target Setting for Participation

11.1.    Given the Department’s clearly stated intention to improve participation among the four target groups, the Committee could have reasonably expected that targets would be set for each of the groups’ participation and, perhaps, that funding would be ring-fenced for these groups. The RDC told the Committee that Government’s target was that 75% of the money spent must be targeted at socially excluded areas, defined areas of disadvantage and socially excluded groups. Where such arbitrary targets are made by government, there must be room for lower-level expenditure targets for groups within these definitions.

11.2.    The very least that the Committee would have expected would have been for some weighting of project selection criteria in favour of those from the under-represented groups.

11.3. However, when this was put to the Department, the surprising responses [37] were that the Department did not:

"intend to establish targets as participation in the programme depends largely on the proposals that are made to the Department" nor was it the intention to:

"weight selection criteria in favour of such groups".

11.4.    The Committee acknowledged the Department’s desire to maintain its ‘bottom-up’ approach, allowing rural communities to bring forward their solutions to local needs. However, where such a process has been shown to have failed to ensure full participation then it is folly to stick rigidly with that process. It cannot be enough to make changes in eligibility for schemes to allow new types of applicants to engage, but then simply to sit back and wait for them to make their proposals.

11.5.    The DARD response contrasted with that given by the RDC [38] . They said that:

"Selection criteria have been identified in broad terms, but detailed criteria have not yet been developed. As with previous programmes there will be significant weighting towards socially excluded groups".

11.6.    While such a commitment refers to the wider issue of social exclusion, at least there is weighting to assist with active targeting. In following up this issue with the RDC, the Committee established that there were pre-determined selection criteria in place (and accessible on the RDC web-site or on request). These criteria showed a possible score of up to 5 out of a possible total of 45 for social exclusion and equality issues. The RDC’s commitment to having significant weighting has therefore been fully met.

11.7.    Despite the DARD stated intention not to weight selection criteria, it was, as has been mentioned earlier in this report, a factor in the LEADER+ selection process. This, together with the RDC approach, creates an inconsistency throughout the programme.

11.8.    The Committee therefore recommends that DARD should introduce weighting of its project selection criteria (in all future calls for projects) in favour of the four target groups and that there should be ‘ring-fencing’ of a percentage of funding for each of the four target groupings (farmers, young people, women and long-term unemployed) within each of its schemes.

12.       Robust Procedures for Monitoring and Measuring Participation of Target Groups

12.1.    Some mention has already been made of monitoring issues. It follows that, if DARD and its agents intend to improve participation of certain groups, not only must they overcome the barriers to participation, but they must monitor it and be able to measure participation of those groups against that of others.

12.2.    The Committee acknowledged and welcomed the Department’s stated intention [39] to monitor participation of under-represented groups. Likewise, members welcomed the RDC’s attempts to explain how they would monitor participation and the RDC’s commitment [40] to report publicly and regularly on it.

12.3.    As long ago as May 2001, the Committee was mildly concerned that the monitoring arrangements for the programme had not yet been developed. However, there was some time to go before programmes got underway and the Committee was assured by DARD [41] that new procedures would be in place before programme delivery commenced.

12.4.    When reviewing and updating its evidence, the Committee asked whether or not these monitoring systems were in place, some two months after the programme’s formal launch. DARD’s response [42] was that:

"Rural Development Division is currently setting up a central database to meet its detailed monitoring requirements, and this will record and monitor participation by priority groups, such as women and young people".

12.5.    DARD went on to explain that European Commission agreement was still awaited on some of the indicators that would be included, and that additional indicators may be generated. That may be so, but the Committee must conclude that the Department has not met the commitments it made to the Committee regarding monitoring procedures. There is a further concern about the specific mention of women and young people in the response, or rather about the exclusion of farmers and long-term unemployed. The Department has highlighted four priority groups and it must therefore ensure that the participation of all four groups is fully monitored.

12.6.    The Rural Development Council is in a similar position. In its response to the Committee’s request for evidence of having monitoring procedures in place, the RDC stated that [43] :

"the monitoring of the participation of socially excluded groups will be on-going over the lifetime of the programme. RDC is preparing to put in place a computerised Management Information Service".

12.7.    The Committee must, therefore, also conclude that the RDC has not met the commitments it made to the Committee regarding monitoring procedures. However, the RDC’s earlier submission [44] stated that application forms would ask applicants to identify which (if any) socially excluded groups are involved in a project. This expectation was met in the standard application form (Part A) and in the RDC specific form (Part B).

12.8.    An important point to realise is that the standard, general form concentrates on the so-called ‘Section 75’ groups, which include women and young people. Of the Department’s four target groups, this leaves out farmers and the long-term unemployed. It seems clear to the Committee that while the Department and the RDC are meeting the mandatory requirements regarding monitoring of participation of Section 75 groups, neither has provided evidence that they are actively monitoring participation of two of the groups said to be targeted by the new phase of the RDP.

12.9.    The Committee’s conclusions must be that while some of the information that is vital to monitoring is being collected through the applications process, neither the Department nor the RDC had its monitoring systems in place and operational by the time the programme was launched and the first calls for projects made. This must be regarded as a failing on both their parts, particularly in light of the criticism made by the PAC (in section 4.19 of its report) about the Department’s slowness in putting in place a comprehensive management information system during earlier rounds of the programme. The monitoring systems must form part of management information and this mistake must not be repeated.

12.10.  It will be vitally important for the Department to demonstrate the outputs of its programmes. An example of what the Committee would like to see avoided was the answer to a member’s question regarding how many of the places on the 390 training courses completed so far under the RDP had been filled by people from the farming industry. The official stated [45] that he could not:

"answer that question specifically. It would take some detailed work – we may not even have the figures".

12.11.  The Committee acknowledges that not every single detail can be monitored or reported against, but when the Department has pledged to improve participation of four target groups, then it must be able to measure and report on every aspect of those groups’ involvement.

12.12.  The Committee recommends that both the Department and the RDC waste no time in implementing their monitoring systems and that, in common with the action recommended for delivery partnerships, they must both introduce active monitoring of participation for all four target groups.

SECOND TERM OF REFERENCE –
FULL AND PROPER APPRAISAL OF ALL PROJECTS

13.       Context

13.1.    The Committee fully acknowledged that the Department, and its agents, must take risks in implementing a regeneration programme of this nature. In promoting social and economic advance, with a particular focus on addressing disadvantage, the programme aims to address the failure of the private sector to take such risks. Members did, however, set great store in the Department’s, and the Minister’s personal, assurances regarding the management of those risks through full and proper appraisal of all projects brought forward under the RDP.

13.2.    The Committee considered this to be one of the areas of greatest concern highlighted by the PAC report. It was covered in Recommendations 4.6 to 4.12 and sections 15 to 27 of that report. Both DARD and DFP generally accepted that there were shortcomings. They also, by and large, accepted the PAC’s recommendations and outlined improvements that had, or would be made.

13.3.    It is worthwhile reviewing some of the PAC’s concerns:

n     failure to adhere to, or even a disregard for, good appraisal practices that were firmly rooted in the public sector;

n     this failure contributing to difficulties experienced by community groups and their projects;

n     lack of an operating manual until seven years after commencement of the programme;

n     the lack of appropriate appraisal training for staff;

n     the failure of business plans to address marketing issues or to ensure the preparation of marketing plans for all economic projects;

n     the poor standard of business plans, prepared by consultants, for major projects; and

n     the failure to properly address project management needs at appraisal stage.

13.4.    These, the Committee, felt, were fairly fundamental issues and absolutely essential for the Department to ‘get right’ in the next round. The protection of public investment was the Committee’s main consideration, but members felt that protection of the interests of project promoters, and indeed of DARD staff, was also important.

14.           Committee’s Expectations

14.1.    In view of the Department’s (and DFP’s) responses to these criticisms, the Committee’s expectations were that:

n     DARD will ensure that absolutely all projects brought forward in the new phase of the programme will be appraised to the standards required by the Department of Finance and Personnel (DFP), regardless of the mechanism of project delivery but commensurate with the projects’ size;

n     DARD can demonstrate that an operation manual is in place prior to the commencement of the new programme, and that this manual clearly covers staff’s responsibilities regarding appraisal;

n     DARD will take all necessary action to ensure that it reviews the performance of consultants, and others, when they produce economic appraisals and business plans. Such reviews would be carried out by those with appropriate expertise, and appraisals either found to have been completed to the required standard, or remedial action taken.

n     DARD will ensure that all staff involved in appraisal have appropriate and on-going training in appraisal; and

n     DARD will ensure that both project management and marketing needs are fully addressed at appraisal stage.

14.2.    While many of these factors are inter-related, the Committee has attempted to separate them for the purpose of making recommendations and reaching conclusions.

15.           Appraisal of all Projects

15.1.    In response to the PAC Report, the Department stated that, since 1996, it had required economic appraisals consistent with the Department of Finance and Personnel’s procedures to be prepared for all rural development projects. In DARD’s written submission to the Inquiry [46] this was further clarified to mean that all projects that receive funding in excess of £1000 must be subjected to an economic appraisal.

15.2.    The Committee accepted that the level of appraisal should be commensurate with the levels of funding and risk. Many of the projects that will be supported under the Rural Development Programme are likely to be small in scale and the Committee agreed with the Minister’s view that it would not be viable to undertake full scale appraisal in every case. The Committee therefore had no difficulty with the concept of a pro-forma approach to appraisal, as outlined by the Minister particularly in view of her assurances [47] that:

"DFP guidance provides for a pro-forma approach to be taken for small projects defined as those with up to £50,000 non-promoter funding. The pro-forma addresses all the main issues set out by the Treasury and DFP guidance, and the Department’s economists oversee the whole appraisal process. Our regime is as robust as that in other Departments".

15.3. Independent research carried out on the Committee’s behalf provided further assurances to the Committee regarding the wording contained in the Northern Ireland Preface to the Green Book. [48] In this, public expenditures of less than £50,000 are referred to (Appendix 1) as is the issue of commensurate effort. In the section dealing with ‘Documentation’ paragraph 14 specifically states that the use of standard pro-forma documentation can be helpful for appraising small expenditure proposals. The role of departmental economists in developing pro-forma documentation, and in providing general advice, is also referred to in the ‘expert advice’ section.

15.4.    The Committee therefore concluded that DARD has acted properly in developing a pro-forma approach for smaller projects.

15.5.    DARD was also clear about its responsibilities for appraising larger projects. In its written submission [49] a "more comprehensive appraisal" was described, for which consultants would normally be appointed. In addition, DARD advised the Committee that all projects costing more than £1m would also be submitted to DFP for final approval. These seemed to the Committee to be reasonable and proper procedures.

15.6.    The Committee was also interested in the positions adopted by the RDC and RCN as agents of the Department in delivering the programme. Where there are other delivery partnerships, the Committee was concerned to ensure that these too would be fully informed as to the need for full and proper appraisal.

15.7.    The RDC committed itself [50] to operating within government guidelines and recorded the likelihood, given the likely size of project to be targeted under the new programmes, that fewer externally commissioned reports would be required. The RDC also committed itself to an open and transparent appraisal process and stated the importance of appraisal procedures being rigorous, while not deterring socially excluded groups from applying for funding. The Committee endorsed this viewpoint as being consistent with its own concerns regarding the applications process.

15.8.    The Committee’s updating of evidence early in 2002 allowed it to check on whether the RDC had in fact met its commitments. Documents obtained by the Committee (referred to later in this report) clearly state the RDC’s policies on economic appraisal and include the pro-forma for use with projects having non-promoter funding of less than £50,000. Also highlighted is the requirement for full economic appraisal of all projects over £50,000, as is the need to submit each of these appraisals to the Department’s economists for scrutiny.

15.9.    The Committee must conclude that the RDC has the appropriate procedures in place to ensure proper appraisal of all projects brought forward under its programmes.

15.10.  Given the nature of the work in which the RCN is to be involved within the programme, their involvement in economic appraisal could be considered less important than that of others. However, the Committee was content with the RCN’s commitment, to the ‘management committee’ of each ‘Rural Support Network’, that they would take each one:

"through a process which will raise issues relating to the objectives of projects and the requirements that the appraisal procedures will place on these projects".

15.11.  The Committee noted that DARD intended to apply a grant ‘ceiling’ to LEADER+ groups and NRRT partnerships that would have the effect of ensuring that pro-forma appraisals were undertaken, rather than full-scale appraisals requiring the employment of consultants. This was entirely consistent with other parts of the programme and caused the Committee no difficulty whatsoever.

15.12.  The Committee did, however, question the comment made in the Department’s submission [51] that:

"it is the responsibility of project officers, whether in DARD, the RDC or partnership groups to ensure that economic appraisals are completed in accord with programme policy".

15.13.  However true this may be in a practical context, with project officers ensuring correct completion of appraisal documentation, the Committee concluded that it is ultimately DARD’s responsibility to ensure that its agents (including RDC, RCN, LEADER+ groups and NRRT partnerships) carry out appraisal to the required standard. DARD must also verify that any use, by these agents, of the pro-forma approach is as thorough as DFP requires.

15.14.  Updates sought in January 2002 again allowed a deeper Committee insight into the Department’s approach to delivery partnerships than might otherwise have been the case. The Committee was able to study the papers issued by DARD when calling for applications from prospective delivery partnerships in both the LEADER+ and NRRT programmes.

15.15.  In the case of LEADER+, the Committee found that the Department’s papers had not been specific about the requirement for all projects to be subject to an economic appraisal. In fact, applicants were asked to provide, as part of their application, details of the procedures that they proposed "for the appraisal and selection of projects and the criteria to be used". In the case of the NRRTi, the Committee found that the paperwork clearly stated that "all projects will be subject to an economic appraisal before a final decision will be given".

15.16.  There was clearly an inconsistency there. In response, [52] DARD simply stated that the documents were general in nature and not intended to detail the full requirements of each programme. DARD assured the Committee that full operating guidance, providing instruction on economic appraisal, will be given to partnerships, in both programmes, before individual projects are being assessed.

15.17.  The Committee accepted the Department’s point that calls for applications would not contain the very detailed guidance necessary for partnerships to deliver the programmes. However, the subject of appraisal is of such fundamental importance that the Committee would have expected reference to it in the documentation. The fact that it was contained in the paperwork for one programme suggests that it should have been contained in the paperwork for the other programme.

15.18.  In the context of the PAC’s major conclusion regarding poor project appraisal, the Committee recommends that DARD must incorporate the most detailed requirements, regarding appraisal, within its forthcoming guidance to delivery partnerships. DARD must also ensure that appropriate checks are in place to ensure compliance with these requirements, and keep a full record of these checks.

15.19.  The Committee also noted that the anticipated ‘ceiling’ on project costs of £50,000 was not mentioned in the calls for applications under either programme. On further investigation, DARD advised that the ‘ceiling’ will apply in the LEADER+ Programme and for community projects under the NRRTi. However, there was now to be a £150,000 ceiling for non-community projects under NRRTi.

15.20.  The Department did not provide an explanation for this departure from its earlier evidence. Indeed, the Committee could see the benefits of a higher spending limit for tourism projects which might involve significant capital investment. The only real consequence in terms of appraisal was the fact that projects over £50,000 would require full (consultant’s) appraisal and this new ceiling would seem to increase the likelihood of consultant’s appraisals being required.

15.21. However, another departure in policy emerged from the Committee’s updating of its evidence. When the Committee obtained a copy of the DARD Procedures Manual (dealt with in more detail later on) it was clear that there was to be pro-forma appraisal of projects up to £150,000, and not the £50,000 as previously defined. In response to a query on this the Department stated that DFP had issued revised guidance, to the effect that full economic appraisals should be completed for all projects over £250,000. However, the Department had taken a policy decision to complete full appraisals for projects over £150,000, with pro-forma appraisals for projects from £1000 up to and including £150,000.

15.22.  This has significant implications for project appraisal under the Rural Development Programme and these are explored further in a later section.

15.23.  On a related issue, the Department of Finance and Personnel had, in its response to PAC conclusion 4.7, forecast that the NI Preface to the Green Book would be replaced in 2001 by a new expanded and updated guide. It would contain more practical guidance tailored to the need of NI Departments. The PAC "attached considerable weight" to DFP’s undertaking to provide this guidance.

15.24. However, when the Committee checked this point at the end of January 2002, DFP had stated, within its revised new TSN (Targeting Social Need) Action Plan, that the timetable for issuing guidance had slipped and would be delayed until well into 2002. The apparent change in requirement for full appraisal (from £50,000 to £250,000) may be related to this new guidance. In any event, the Committee would urge DFP to expedite the new guidance.

15.25.  The Committee also recommends that DARD should review and revise its procedures manuals as soon as new guidance becomes available, in order that staff comply fully, and quickly, with any new, or changed, requirements.

16. Procedures Manuals to be in place Incorporating Appraisal Guidance

16.1.    The PAC was adamant that the Department should have had an operating manual, for its earlier programmes, in place much sooner than it did. In response, accepting the PAC recommendation, the Department stated that a manual would be in place before the start of the 2001 to 2006 programme.

16.2.    This commitment was repeated to the Committee in the Department’s evidence [53] . The Minister said:

"The procedures for the new RDP that is currently being drafted will set out the requirements for economic appraisals. Those will refer to the appropriate Treasury and DFP guidance" and "the procedures manuals are being drafted and they will be available to staff in advance of the new programmes being launched".

16.3.    The RDC also committed to having operations manuals in place, and for the appraisal system to be fully documented within those manuals.

16.4.    The Committee welcomed those assurances at the time. The updating of evidence, in January 2002, allowed the assurances to be tested, given that the Rural Development Programme had been formally launched in November 2001 and initial calls for projects had been made.

16.5.    The RDC replied [54] twelve days after the issue of the Committee’s letter seeking further evidence and the reply included electronic copies of the RDC’s "Operations" and "Programmes" Operations Manuals. The latter clearly states the RDC policy on economic appraisals and includes the actual pro-forma to be used for all projects with non-promoter funding of less than £50,000. It also requires full economic appraisals for projects of £50,000 and over.

16.6.    The Committee therefore concluded that the RDC had met its commitments with regard to the provision of manuals and the inclusion of economic appraisal requirements in them.

16.7.    The Department’s response, dated 14 February 2002, was less comprehensive. It was to the effect that a general (EU) Structural Funds Manual was published on the DFP web-site and that this included a section on economic appraisal. The Department went on to say that internal procedures were in place for the element of the programme that had called for projects (under the NI Programme for Building Sustainable Prosperity). DARD’s response concluded by saying that the procedures would be forwarded to the Committee "shortly" and that they included instructions and guidance on economic appraisal.

16.8.    It was almost two weeks later (26 February 2002) that the Committee received the electronic version of a 217-page manual. This does, as promised, contain instructions and guidance on economic appraisal and incorporates the actual pro-forma to be used for smaller projects.

16.9. However, while the pro-forma stated that it was to be used for projects between £1000 and £150,000, (as outlined in the previous section) a checklist contained in the manual referred to projects from £5000 to £50,000. When this was drawn to DARD’s attention, the response was an undertaking to correct the discrepancy and a statement that the procedures are a "working document" that would be revised and updated regularly.

16.10.  Finally, DARD advised that ‘Operating Guidance’ (with instruction on economic appraisal) was currently being drafted and would be in place to guide LEADER+ and NRRTi partnerships before actual projects get underway. Calls for individual projects, DARD said, would not be made "for some months".

16.11.  In reaching conclusions on DARD’s preparedness, the Committee must compare the RDC’s ability to produce electronic manuals immediately, with DARD’s inability to do so until almost 2 weeks after its written response. There is certainly an inference to be drawn that the procedures were not in fact ready when the Committee made its initial request. The fact that a checklist for appraisal, within the manual that was eventually forwarded, contained a discrepancy in figures from the appraisal pro-forma itself, did not instil members’ confidence in the manual. It could also be said to add weight to the Committee’s suspicions about the manual’s state of readiness.

16.12.  The Committee did not accept the existence of a DFP manual on its web-site as any sort of adequate substitute for an internal procedures manual, properly developed and issued to staff involved in implementing a programme. This is particularly important since staff were potentially receiving applications since November last year.

16.13.  The Committee acknowledged that project calls in the NRRTi and LEADER+ programmes may indeed still be some time away. However, given that the new programmes have been in development since as long ago as 1999, the Committee would have expected the Department to have been in a position of having guidance ready for the partnerships by now. The further assurances made by DARD regarding operational guidance now take on extreme importance and the Committee stresses the need for commitments to be met before any calls for projects.

16.14.  The Committee must conclude that DARD has not met the commitments made to the Committee in respect of procedures manuals for all of its component programmes.

16.15.  The Committee therefore recommends that DARD should seek an audit assessment of its current procedures manual for the NI Programme for Building Sustainable Prosperity without delay. Such an assessment would necessarily include an assessment of whether the procedures are currently being followed on the ground.

16.16.  The Committee further recommends that DARD should complete its operational guidance for the NRRTi and LEADER+ Programmes before it begins assessment of the business plans currently being developed by each of these partnerships.

17.           Appropriate Review of Appraisal Standards and Training of Staff

17.1.    In the early part of its Inquiry, the Committee welcomed the involvement of DARD economists in the appraisal process, specifically in relation to the quality of work related to appraisals, and the involvement of DFP in projects over £1m [55] . The Committee felt that both would be relatively independent from the project’s promoters and from staff who may be inclined to act as ‘champion’ for a project, having perhaps been involved in it, or with the promoters, for some time.

17.2.    The Committee also welcomed the stated availability of accountancy support from within DARD, where the economists, or project staff, determined it to be necessary on any aspect of an appraisal or business plan. Where expertise exists, within the Department, it should be fully utilised to ensure best practice in appraisal, and the Committee saw merit in accountancy advice being considered by project assessment panels.

17.3.    The Committee also gave a broad welcome to the move by DARD and RDC to ‘take over’ the commissioning and appointment of consultants when they are required to complete economic appraisals. Members endorsed the Department’s belief [56] that this will result in more independent appraisal and better monitoring and control of consultants. The Committee was, however, concerned that appointment of consultants must be fully in accordance with Government guidelines.

17.4.    The Committee further endorsed the RDC point about their approach having the positive effect of leaving communities to focus on project delivery rather than managing consultants. However, the Committee noted a possible inconsistency in the RCN’s approach, with that organisation saying that it will help groups draw up Terms of Reference for consultants. Their argument [57] was that a group, in making the decision about which consultant to use, would develop skills which facilitate local decision-making and accountability. The Committee saw merits in this argument. However, where appraisal is concerned, the Committee felt that consistency of approach was more important.

17.5.    The Committee therefore recommends that the RCN adopts the same approach as the other two main delivery organisations in managing consultants involved in economic appraisal.

17.6.    When the PAC was critical of business plans that had been produced by consultants for early RDP projects, it advised that quality review procedures should be in place in a programme that has substantial consultancy inputs. DARD’s approach, originally, was to have the Department’s economists consider a sample of pro-forma project appraisals, for grants up to £50,000, and to consider appraisals for all projects involving grants of more than £50,000. The RDC stated [58] its intention to introduce quality review procedures for consultants preparing economic appraisals, business plans and mentoring services to community clients.

17.7.    This Report has already mentioned that the RDC’s procedures require all project appraisals for grants over £50,0000 to be forwarded to the Department’s economists. In addition to this, the RDC procedures include a quality review of consultants’ work after they have undertaken two assignments under the programme. This review would take account of the views of both DARD economists and the client group. The Committee was content that these actions represent an improvement in previous practice and a sensible approach.

17.8.    The Department’s approach does not seem to have such a built-in quality review of consultants’ work. Certainly the economists, to whom all appraisals for projects over £150,000 are sent for scrutiny, have an opportunity to comment on the standards being reached. DARD’s manual suggests that economists may seek additional information from the applicant, and that this must be provided within six weeks. However, this does not equate to a quality review, by the economists, of the standards of appraisal of a particular consultant. The Committee believes that it is important for consultants to provide value for money spent on their services.

17.9.    DFP, in its response to the PAC Report, provided assurances that comprehensive guidance regarding the monitoring of consultancy assignments already exists and is accessible by Departments. This guidance includes a ‘Model System for the Use and Control of Consultants.’ The Committee’s expectation would be for DARD to comply fully with this guidance. However, the guidance will be of a general nature and there may be expectations of consultants that are unique to the Rural Development Programme.

17.10.  The Committee therefore recommends that DARD should incorporate a formal review of a consultant’s performance, following consideration of two full economic appraisals from that consultant. Any shortcomings should be discussed immediately with the relevant consultant and remedial action agreed before further appraisals are accepted from that source. This action would be in addition to compliance with existing DFP guidance.

17.11.  DARD has, it seems, built in both a training requirement and a quality review for the completion of pro-forma economic appraisals by ‘Project Officers’.

17.12.  The Department’s manual insists that these appraisals may only be carried out by officers who have received appropriate training, and that they must receive refresher training at not more than 18 month intervals. The Committee would endorse these requirements but caution that appropriate procedures are put in place to ensure that they are adhered to as the programme develops.

17.13.  The review comes into effect if a Project Officer submits "more than three" economic appraisals which are considered by the Rural Area Co-ordinator or the economists to be unacceptable. At that point the officer will receive refresher training before being permitted to undertake any further appraisal.

17.14.  On the face of it, this might seem to be a reasonable requirement. However, when put in the context of the proposed 5% sampling by economists of all pro-forma appraisals and the newly increased amount of project funding for which pro-forma appraisal is permitted, the Committee considers this not to be an appropriate level of quality review.

17.15.  Firstly, the Committee endorses the Department’s decision not to move to pro-forma appraisal for all projects of less than £250,000, as appears to be permitted by new DFP guidance. By any standards, a quarter of a million pounds is a significant amount of project funding and a full appraisal of a project at this level of funding should be a requirement.

17.16. However, the move from £50,000 to £150,000 for pro-forma appraisal has its own risks, not least the possibility that inexperienced staff might not complete these to the required standard. There must be a risk that an officer could put through a great deal of sub-standard project appraisals, each potentially involving funding of up to £150,000, before this was discovered and remedial action taken.

17.17.  DARD was clear, in two of its written submissions, [59] about the need to ensure staff are trained:

"Specific training will be made available to all Department staff, and to staff of agents delivering the programme on the Department’s behalf, who are involved in the appraisal process" and "It will be a requirement that all staff involved in the appraisal process receive appropriate training".

17.18.  The RDC was slightly more specific, when acknowledging the need to ensure staff are well trained [60] . It recognised the need for business acumen, and to be able to look at a business project and make an economic and investment appraisal. In its response [61] to ‘update’ questions, the RDC confirmed that staff members have undergone training on financial and economic appraisal techniques.

17.19.  The Committee would have some concern about the reference to RDC staff having had "some initial DARD training on economic appraisals" and the RDC’s intention to augment this with "focused training". This might be construed as an inference that the DARD training was basic and therefore insufficient to ensure competence in appraisal.

<< Prev       Next >>