Northern Ireland Assembly Flax Flower Logo
Session 2008/2009
First Report

PUBLIC ACCOUNTS COMMITTEE

First Composite Report On Issues Dealt With By Correspondence

TOGETHER WITH THE MINUTES OF PROCEEDINGS OF THE COMMITTEE
RELATING TO THE REPORT AND THE MINUTES OF EVIDENCE

Ordered by The Public Accounts Committee to be printed 4 September 2008
Report: 3/08/09R Public Accounts Committee

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Public Accounts Committee
Membership and Powers

The Public Accounts Committee is a Standing Committee established in accordance with Standing Orders under Section 60(3) of the Northern Ireland Act 1998. It is the statutory function of the Public Accounts Committee to consider the accounts and reports of the Comptroller and Auditor General laid before the Assembly.

The Public Accounts Committee is appointed under Assembly Standing Order No. 51 of the Standing Orders for the Northern Ireland Assembly. It has the power to send for persons, papers and records and to report from time to time. Neither the Chairperson nor Deputy Chairperson of the Committee shall be a member of the same political party as the Minister of Finance and Personnel or of any junior minister appointed to the Department of Finance and Personnel.

The Committee has 11 members including a Chairperson and Deputy Chairperson and a quorum of 5.

The membership of the Committee since 9 May 2007 has been as follows:

Mr Paul Maskey*** (Chairperson)
Mr Roy Beggs (Deputy Chairperson)

Mr Thomas Burns** Mr Trevor Lunn
Mr Jonathan Craig Mr Ian McCrea*
Mr John Dallat Mr Mitchel McLaughlin
Mr Simon Hamilton Ms Dawn Purvis
Mr David Hilditch

* Mr Mickey Brady replaced Mr Willie Clarke on 1 October 2007
* Mr Ian McCrea replaced Mr Mickey Brady on 21 January 2008
* Mr Jim Wells replaced Mr Ian McCrea on 26 May 2008
** Mr Thomas Burns replaced Mr Patsy McGlone on 4 March 2008
*** Mr Paul Maskey replaced Mr John O’Dowd on 20 May 2008

Table of Contents

List of abbreviations used in the Report

Report

Executive Summary

Introduction

Financial Auditing and Reporting: 2003-3004 (HC 96):
Accountability to Parliament by Education and Library Boards

Financial Auditing and Reporting: 2003-2004 (HC 96): Department of Health,
Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charge

Financial Auditing and Reporting 2004-2005 (HC 1199): Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rules

Financial Auditing and Reporting: 2003-2004 (HC 96):
Northern Ireland Child Support Agency Client Funds Account 2003-04

Financial Auditing and Reporting: 2004 -2005 (HC 1199):
Department for Social Development: Resource Account 2004-05

The Private Finance Initiative: Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

Memorandum of Reply: Department of Social Development: Housing the Homeless (CM 6283)

Memorandum of Reply: Control of River Pollution in Northern Ireland (NIA 51/00)

Appendix 1

Minutes of Evidence

Appendix 2
(a) Financial Auditing and Reporting: 2003-3004 (HC 96): Accountability to Parliament by Education and Library Boards

Chairperson’s letter of 10 September 2007 to Mr Will Haire, Accounting Officer,
Department of Education.

Correspondence of 12 October 2007 from Mr Will Haire, Accounting Officer,
Department of Education.

Chairperson’s letter of 17 December 2007 to Mr Will Haire, Accounting Officer,
Department of Education.

(b) Financial Auditing and Reporting: 2003-2004 (HC 96): Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

Chairperson’s letter of 10 September 2007 to Dr Andrew McCormick, Accounting Officer,
Department of Health, Social Services and Public Safety.

Correspondence of 5 October 2007 from Dr Andrew McCormick, Accounting Officer,
Department of Health, Social Services and Public Safety.

Chairperson’s letter of 17 December 2007 to Dr Andrew McCormick, Accounting Officer,
Department of Health, Social Services and Public Safety.

(c) Financial Auditing and Reporting 2004-2005 (HC 1199): Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rules

Chairperson’s letter of 10 September 2007 to Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

Correspondence of 4 October 2007 from Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

Chairperson’s letter of 13 December 2007 to Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

Correspondence of 11 January 2008 from Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

Chairperson’s letter of 4 September 2008 to Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

(d) Financial Auditing and Reporting: 2004 -2005 (HC 1199):
Department for Social Development: Resource Account 2004-05

Chairperson’s letter of 10 September 2007 to Mr Alan Shannon, Accounting Officer,
Department for Social Development.

Correspondence of 5 October 2007 from Mr Alan Shannon, Accounting Officer,
Department for Social Development.

Chairperson’s letter of 17 December 2007 to Mr Alan Shannon, Accounting Officer,
Department for Social Development.

(e) The Private Finance Initiative: Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

Chairperson’s letter of 10 September 2007 to Mr Paul Sweeney, Accounting Officer,
Department of Culture, Arts and Leisure.

Correspondence of 25 October 2007 from Mr Paul Sweeney, Accounting Officer,
Department of Culture, Arts and Leisure.

Chairperson’s letter of 13 December 2007 to Mr Paul Sweeney, Accounting Officer,
Department of Culture, Arts and Leisure.

Correspondence of 15 January 2008 from Mr Paul Sweeney, Accounting Officer,
Department of Culture, Arts and Leisure.

Chairperson’s letter of 4 September 2007 to Mr Paul Sweeney, Accounting Officer,
Department of Culture, Arts and Leisure.

(f) Memorandum of Reply: Department of Social Development: Housing the Homeless (CM 6283)

Chairperson’s letter of 7 September 2007 to Mr Alan Shannon, Accounting Officer,
Department for Social Development.

Correspondence of 8 October 2007 from Mr Alan Shannon, Accounting Officer,
Department for Social Development.

Chairperson’s letter of 25 October 2007 to Mr Alan Shannon, Accounting Officer,
Department for Social Development.

(g) Memorandum of Reply: Control of River Pollution in Northern Ireland (NIA 51/00)

Chairperson’s letter of 25 October 2007 to Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

Correspondence of 22 November 2007 from Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

Chairperson’s letter of 13 December 2007 to Dr Malcolm McKibbin, Accounting Officer,
Department of Agriculture and Rural Development.

Chairperson’s letter of 25 October 2007 to Mr Stephen Peover, Accounting Officer,
Department of the Environment.

Correspondence of 20 November 2007 from Mr Stephen Peover, Accounting Officer,
Department of the Environment.

Chairperson’s letter of 13 December 2007 to Mr Stephen Peover, Accounting Officer,
Department of the Environment.

Correspondence of 11 January 2008 from Mr Stephen Peover, Accounting Officer,
Department of the Environment.

Chairperson’s letter of 3 March 2008 to Mr Stephen Peover, Accounting Officer,
Department of the Environment.

List of Abbreviations used in the Report

NIA Northern Ireland Assembly

NIAO Northern Ireland Audit Office

MOR Memorandum of Reply

C&AG Comptroller and Auditor General

ELFNI Electronic Libraries for Northern Ireland

ELB Education and Library Board(s)

BELB Belfast Education and Library Board

SEELB South Eastern Education and Library Board

DE Department of Education

RPA Review of Public Administration

ESA Education and Skills Authority

EPES Electronic Prescribing and Eligibility System

TNF Tumour Necrosis Factor

NICE National Institute for Health and Clinical Excellence

DHSSPS Department of Health, Social Services and Public Safety

DARD Department of Agriculture and Rural Development

CAFRE College of Agriculture, Food and Rural Enterprise

EU European Union

NICSA Northern Ireland Child Support Agency

URCDG Urban Regeneration and Community Development Group

QAIU Quality Assurance and Improvement Unit

VCU Voluntary Community Unit

ICT Information and Communication Technology

ICU Intelligent Customer Unit

DOE Department for the Environment

SSAFO Regulations Control of Pollution (Silage, Slurry and Agricultural Fuel Oil) Regulations (Northern Ireland) 2003

CMB Countryside Management Branch

EHS Environment and Heritage Service

NIRDP Northern Ireland Rural Development Plan

NIW Northern Ireland Water

Executive Summary

Introduction

1. Due to the suspension of the Northern Ireland Assembly (NIA) on 15 October 2002 a number of NIAO reports were available for the Public Accounts Committee to consider when the NIA resumed in May 2007. The Committee decided that it would not be able to consider all the outstanding reports individually and agreed to take written evidence and report on a number of these reports in a composite report.

2. The Committee decided that this report should consider written evidence on the following NIAO reports:

3. In the Committee’s view the departments have provided full information to support the recommendations in these reports.

4. The Committee also decided to request updates on certain Memoranda of Reply in which departments responded to recommendations in the House of Commons Committee for Public Accounts reports during the suspension of the NIA.

5. The updated information on the recommendations on the Memoranda of Reply (MOR) have been or will be reported[1] on separately, except for the following which will be included within this report:

6. The Committee agreed that NIAO should include some further work on Housing the Homeless in its future work programme and decided that, in relation to Control of River Pollution in Northern Ireland, members would raise some issues of concern when the relevant Accounting Officer was attending a future evidence session. In the meantime, NIAO would keep the matter under review.

Introduction

1. During the 2007/08 session, the Public Accounts Committee (the Committee) wrote to the relevant Accounting Officers on 10 September 2007 on issues arising from the following reports from the Comptroller and Auditor General (C&AG), for details on what action had been taken on the C&AG’s recommendations:

2. On receipt of each response, the Committee assessed the action taken by the department in order to ensure that it had adequately addressed the findings, conclusions and recommendations of the relevant reports. The results of these assessments are detailed below.

3. The Committee also decided to request an update from departments on the progress against the departments’ responses to the House of Commons Committee of Public Accounts’ conclusions in relation to the following Memoranda of Reply:

4. On receipt of each response, the Committee assessed the action taken by each department in order to ensure that it had adequately addressed its commitment to the recommendations outlined in the Memorandum of Reply. The results of these assessments are detailed below.

Financial Auditing and Reporting:
2003 – 2004 (HC 96):
Accountability to Parliament by Education and Library Boards

5. The Committee wrote to the Accounting Officer, Department of Education, on 10 September 2007, detailing a number of questions in relation to the above report (see Appendix 2(a)).

6. The Accounting Officer replied to the Committee on 12 October 2007 providing a full response to the Committee’s questions (see Appendix 2(a)).

7. The Committee focussed on four areas where the NIAO report had highlighted problems, namely:

8. The Accounting Officer responded to the Committee on 12 October 2007. The following is a summary of the response.

BELB – Aggregated Schools Budget/LMS savings; Schools non-delegated savings; and Services to schools – Centre savings;

SEELB – Services to schools – Centre savings.

The Department has indicated that two Finance and Accounting projects have been established under the RPA programme, one within the Department and one within the ESA Implementation Team, to ensure that financial management issues are identified, planned for and effectively implemented in the new ESA. The Department provided examples of areas which are being taken forward, and assured the Committee that work had already commenced and progress will be carefully monitored as the date for commencement of ESA approaches, ensuring the basis for a sound culture of financial management within the new organisation.

9. The Committee considered the Accounting Officer’s response at its meeting on 13 December 2007, and members expressed that they were content with the detailed response.

10. The Committee wrote to the Accounting Officer on 17 December 2007 to advise that members were content with the response.

Financial Auditing and Reporting:
2003 -2004 (HC 96):
Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

11. The Committee wrote to the Accounting Officer, Department of Health, Social Services and Public Safety, on 10 September 2007, detailing a number of questions in relation to the above report (see Appendix 2(b)).

12. The Accounting Officer responded to the Committee on 5 October 2007 (see Appendix 2(b)), providing a full response, which the Committee considered at its meeting on 13 December 2007.

13. The Committee focussed on seven areas where the NIAO report had highlighted problems, namely:

14. The following is a summary of the Accounting Officer’s response:

(a) a dedicated Counter Fraud Unit in the Central Services Agency;

(b) confirmation by community pharmacists, dentists and optometrists as to whether a patient pays for treatment before receiving same;

(c) introduction of legislation whereby a fixed penalty charge of up to £100 can be faced by patients who do not pay statutory health charges when they should and implementation of the Electronic Prescribing and Eligibility System (EPES) to facilitate identification of persistent offenders and enable prosecution;

(d) the EPES system is undergoing detailed systems testing prior to the pilot stage and final implementation; and

(e) the Department has run a range of publicity campaigns including patient leaflets, posters, advertising, and radio and television interviews to inform the public and practitioners as to entitlements for exemptions and sanctions for those who deliberately defraud the Health Service.

The Department also provided statistical data relating to the level of loss, which for 2006/07 had fallen to £8.9m, which represents 4.27%, a reduction over the 2004/05 level of £9.2m or 8.14%. The Department has indicated that it recognises that this level of loss remains unacceptable and is currently considering how it can best utilise the potential offered by the EPES project.

The Department estimates that funding of £9.2m could secure up to 13,000 cataract operations, or up to 1675 hip replacements, or up to 1500 knee replacements or up to 975 coronary bypasses. However, the Department points out that it is unrealistic to assume that all of the monies lost could be secured as there will always be some level of fraud, despite its best efforts.

The Department has indicated that there are two main reasons for non-payment of charges, i.e. deliberate and conscious attempt to evade payment or genuine misunderstanding of the qualifying conditions for the exemption from payment. A number of extensive information campaigns have been conducted by the Department to raise understanding and awareness of the conditions for exemption from payment of charges.

The Department has confirmed that there are 509 patients currently waiting for treatment with anti-TNF therapy (a drug to treat rheumatoid arthritis) with further patients added each month. The average cost per patient is £11,000. It would cost in the region £15m to treat all patients currently considered to be clinically appropriate for treatment.

The Department assured the Committee that it will continue to seek additional resources to improve access to specialist drugs which offer the potential for significant improvement in patient care, and has established links with the National Institute for Health and Clinical Excellence (NICE). All guidance published by NICE from 1 July 2006 is reviewed locally for its applicability to Northern Ireland, and guidance is issued to the Health and Social Care sector on its implementation here.

The Department has confirmed that there was £8.9m prescription fraud in 2006/07. This, however, is a reduction of £9.9m from the 1999/00 figure of £18.8m. The Counter Fraud Unit has responsibility for the reduction in patient exemption fraud and has directly recovered some £468,000 from patients in the last 5 years in respect of prescription, dental and ophthalmic health charges and fixed penalty charges. This level of recovery was derived directly from sample checks carried out. The introduction of EPES will bring about an increase in the volume of exemption validation checks. Further deterrents are:

15. The Department has provided an explanation of the EPES. It will provide prescription information, including claims for exemption, to be captured electronically, enabling claims for exemption from charges (for those in receipt of qualifying Social Security benefits) to be electronically validated against Social Security computer records. This will offer the opportunity for significantly greater volumes of exemption checks to be carried out and it follows therefore that there will be greater potential to deter and reduce the level of fraud. The EPES will also offer significant efficiencies in community pharmacy processes and reimbursement processes in the Central Services Agency. The target is for EPES to be rolled out to 90% of the community pharmacies by September 2008.

16. The Committee considered the Accounting Officer’s response at its meeting on 13 December 2007, and members expressed that they were content with the detailed response.

17. The Committee wrote to the Accounting Officer on 17 December 2007 to advise that members were content with the response.

Financial Auditing and Reporting:
2004 – 2005 (HC 1199):
Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rules

18. The Committee wrote to the Accounting Officer, Department of Agriculture and Rural Development, on 10 September 2007, detailing a number of questions in relation to the above report (see Appendix 2 (c)).

19. The Accounting Officer responded to the Committee on 4 October 2007 (see Appendix 2(c)), which the Committee considered at its meeting on 13 December 2007. The Committee agreed that there were some further issues on which it asked for further information, and the Accounting Officer provided a further response on 11 January 2008.

20. The Committee focussed on five areas where the NIAO report had highlighted problems, namely:

21. The following is a summary of the Accounting Officer’s initial response:

22. The Committee asked for further information and clarification on a number of issues raised in the second, third, and fourth bullet points of the previous paragraph. The Committee’s correspondence with the Department and the Department’s responses are in Appendix 2(c).

23. The additional questions posed by the Committee focussed on further clarification on issues as follows:

The actions which the Department took to monitor, control and seek to reduce the number of claims; the Department confirmed that the project must document the reasons for the item being specialised, it is then reviewed by a senior staff member and often referred for independent verification of its specialism by Loughry College[2]. The Department also selects for assessment for compliance with tendering a 10% sample which is twice the percentage of the EU recommendation.

24. The Committee considered this further evidence at its meeting on 4 September 2008 and members were satisfied on the basis of evidence presented to them that DARD was adhering to the procurement rules in relation to processing and marketing grant applications.

Financial Auditing and Reporting:
2003 – 2004 (HC 96):
Northern Ireland Child Support Agency Client Funds Account 2003-04

25. The Northern Ireland Child Support Agency (NICSA) replied to the Committee’s correspondence of 10 September 2007 detailing a number of questions relating to the NIAO report, and received a reply from the Accounting Officer on 5 October 2007.

26. The Committee considered the Accounting Officer’s response at its meeting on 25 October 2007 and decided that a number of issues raised in the response would be better clarified in an oral evidence session.

27. The Committee held an oral evidence session on 17 January 2008 at which the Accounting Officer, Mr Alan Shannon, the Chief Executive of the NICSA, Mrs Mary Quinn, and the Director of Resources, Ms Andrea Orr, answered members’ questions.

28. The Committee has published a separate report on this subject, which can be accessed on the Northern Ireland Assembly website as follows:
http://archive.niassembly.gov.uk/public/2007mandate/reports/report21_07_08r.htm

Financial Auditing and Reporting:
2004 – 2005 (HC 1199):
Department for Social Development: Resource Account 2004-05

29. The Committee wrote to the Accounting Officer, Department of Social Development, on 10 September 2007, detailing a number of questions in relation to qualified audit opinion arising from weaknesses in financial control and monitoring of expenditure in relation to Urban Development and Community Development Grants to Voluntary and Community Bodies, in the above report (see Appendix 2(d)).

30. The Accounting Officer responded to the Committee on 5 October 2007 (see Appendix 2(d)), which the Committee considered at its meeting on 13 December 2007.

31. The Committee focussed on nine areas where the NIAO report had highlighted problems, namely:

32. The following is a summary of the Accounting Officer’s response:

For the year ended March 2007, he noted that a substantial assurance[3] was appropriate for the quality systems of the Regional Development Office, the North West Development Office, and the Belfast Regeneration Office, with a limited assurance[4] rating for the Building Sustainable Prosperity Measure 3.3 [Voluntary and Community Unit].

During 2006-07 QAIU results indicated that a number of business areas had achieved high levels of accuracy in the processing of grant payments, which, in the Department’s view, support the decision to centralise QAIU and demonstrate that the unit’s checking against areas of concern and its advice and guidance function are being carried out effectively and efficiently, clearly achieving value for money.

As previously stated, Internal Audit Unit acknowledged for the year ended March 2007, the extent and nature of improvements in performance identified across the Group would normally have resulted in a substantial assurance rating. The overall limited assurance rating given for the Group was based solely on failings identified in BSP Measure 3.3 administered by Voluntary and Community Unit. This further demonstrates greater value for money is being achieved in the Department’s funding to the voluntary and community sector.

33. The Committee considered the Accounting Officer’s response at its meeting on 13 December 2007, and members expressed that they were content with the detailed response.

34. The Committee wrote to the Accounting Officer on 17 December 2007 to advise that members were content with the response.

The Private Finance Initiative:
Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

35. The Committee wrote to the Accounting Officer, Department for Culture, Arts and Leisure, on 10 September 2007, detailing a number of questions relating to the Department’s assessment of the effectiveness and other measures of value for money of the Electronic Libraries for Northern Ireland (ELFNI) system (see Appendix 2(e)), as contained in the NIAO report ‘The Private Finance Initiative: Electronic Libraries for Northern Ireland’ (HC 523, Session 2005-06).

36. The Accounting Officer responded to the Committee on 5 October 2007 (see Appendix 2(e)), which the Committee considered at its meeting on 13 December 2007.

37. The Committee focussed on nine questions, namely:

38. The Accounting Officer informed the Committee that the Department’s main assessment of the effectiveness and value for money of the ELFNI project will be through the outcome of the Gate 5 review (Operations Review and Benefits realisation) which is currently underway. The following is a summary of the Accounting Officer’s response to the Committee’s questions:

As regards usage, each Board is provided with regular statistics on the use of the Peoples Network services and other management information includes hits on the NI-Libraries.net portal. Detailed analysis includes insight into the active membership of the 5 library services and their usage of recordable services, active computer user and active member. There is also analysis of online transactions on the number of library transactions, and this information is used by the Education and Library Boards (ELBs) to monitor and tailor services accordingly.

To meet wider government needs, the system provides equal and free access to automated library facilities, the internet and e-Government services in all static and mobile libraries across Northern Ireland; other benefits include the use of the customer survey software on public access computers to assist the Department with the consultation on the future of libraries - there were nearly 1000 electronic submissions from members of the public.

The training element has been delivered in two ways i.e. through the provision of online tutorials and through formal training courses including an induction training course for new staff and specific software courses. This is co-ordinated through an ELFNI training group made up of representatives of the five Boards. The levels of support are assessed on a monthly basis as part of the service review mechanism. The number of application support calls currently accounts for 20% of the service provider’s help desk work (8643 of the 40858 support calls to date).

There has not been ongoing assessment of the monetary value of the training and support application; however, the lead board for the ELFNI project is North Eastern Education and Library Board, and it will establish the monetary value of the training and support provided and evaluate whether taking back responsibility for the disposal of stock has proved value for money.

The Department was tasked with improving performance through general efficiency savings in the Boards. Some of these savings were made possible by the ELFNI system. It is difficult to quantify these savings; however between year 2005/06 and 2006/07 the total cumulative non-resource releasing efficiency savings in the region of £2m was achieved.

The Gate 5 review will assess the achievement of specific benefits from the ELFNI project as detailed in the original business case.

All staff are subject to the agreed policy of the five Boards on the use of e-mail and internet and in terms of overall management a five Board IT Security Group has been established as a function on an Operational Management Group. Sanctions imposed have included the suspension of a number of library staff.

Members of the public found breaching the procedures mentioned above have been warned or barred from using the services. In terms of illegal acts, hardware has been provided to the PSNI for forensic examination on a number of occasions. This has been following a report by library staff who have suspected illegal activity and has also been on occasions initiated through a request by PSNI.

39. The Committee considered this reply on 13 December 2007 and agreed to forward further questions relating to the first, second, third, fourth and eighth bullet points of the previous paragraph. The Committee’s correspondence with the Department and the Department’s responses are in Appendix 2(e).

40. The Department’s response is summarised as follows:

Initial demand for computer access was extremely high in most locations. This demand has since moderated, although at busy periods there is still a demand for computers which outstrips supply. This demand was assessed in each board when the possibility of transfer of services was possible. Since the start of the contract a number of new libraries have been built and buildings refurbished. This has enabled the libraries to house more terminals than was possible at the start of the ELFNI project and comes closer to meeting customer demands. Locations have been changed to provide maximum benefit for the public as space and demand change.

If no transfer of any public or staff computers had taken place the saving in the unitary charge payment in total for the libraries closed would be £1543 per month – the total saving that would have accrued to December 2007 is £42,698.

The Department has confirmed that additional computers are being well used wherever they have been relocated, and has provided an analysis of sessions used by library location.

41. The Committee considered the additional information provided by the Department at its meeting on 4 September 2008 and was content with the response.

Memorandum of Reply:
Department of Social Development:
Housing the Homeless (CM 6283)

42. The Public Accounts Committee decided to request an update on the progress against the Department of Social Development’s responses to the conclusions of the House of Commons Committee of Public Accounts report ‘Department of Social Development: Housing the Homeless’, and wrote to the Department on 7 September 2007.

43. The Department replied to the Committee’s correspondence on 8 October 2007 (see Appendix 2(f)), which the Committee considered at its meeting on 25 October 2007.

44. The Accounting Officer informed the Committee that all the conclusions of the report have been fully addressed. The Accounting Officer’s response relates to some issues relating to conclusions 3, 6 and 7, and 13, and has been summarised as follows:

In July 2007 the Department published the strategy document ‘Including the Homeless’ based on the outcome of the consultation on the Working Group’s report. The Department has established an interdepartmental cross-sectoral Steering Group to oversee and ensure the implementation of the strategy, which includes an action plan of appropriate measures to address the causes and effects of homelessness in Northern Ireland.

45. The Committee considered the Accounting Officer’s response (see Appendix 2(f)) at its meeting on 25 October 2007 and agreed that NIAO should include some further work on this issue in its future work programme.

Memorandum of Reply:
Control of River Pollution in Northern Ireland (NIA 51/00)

46. The Public Accounts Committee decided to request an update on the progress against the Department of Agriculture and Rural Development (DARD) and Department of the Environment’s (DOE) responses to the conclusions of the House of Commons Committee of Public Accounts report ‘Control of River Pollution in Northern Ireland’, and wrote to the Departments on 25 October 2007.

47. The Departments replied individually to the Committee’s correspondence - DARD on 22 November and DOE on 20 November 2007 (see Appendix 2(g)).

48. The Accounting Officer for DARD informed the Committee that the Department has implemented a series of actions to reduce water pollution arising from agricultural sources and provided detailed information on each of these actions which are:

49. The Accounting Officer for DOE provided the Committee with an update on each of the outstanding conclusions in the House of Commons Committee on Public Accounts report. (see Appendix 2(g)).

50. The Committee considered the responses from the Accounting Officers for DARD and DOE at its meeting on 13 December 2007.

51. The Committee was content with the response from DARD.

52. Members agreed to forward further questions to the Accounting Officer, DOE, relating to conclusions 12, 17, 36 and information on the year-on-year trend in the numbers and types of pollution incidents since 2001, and what proportion has resulted in prosecution, together with the outcomes of the prosecutions.

53. The Committee’s correspondence with the Departments and the Departments’ responses are in Appendix 2(g).

54. The DOE’s further response is summarised as follows:

55. The Committee considered this further information from DOE at its meeting on 28 February 2008 and considered that there are some issues relating to types or sources of incidents of pollution which they would wish to address when the Accounting Officer next appears before the Committee, on a date which has not yet been determined.

[1] Further Report on the Use of Operating Theatres in the Northern Ireland Health and Personal Social Services http://archive.niassembly.gov.uk/public/2007mandate/reports/report25_07_08r.htm

Managing Sickness Absence in the Northern Ireland Civil Service http://archive.niassembly.gov.uk/public/2007mandate/pacreport07.htm

Memorandum of Reply: Department of Education: Improving literacy and numeracy in schools (Northern Ireland)

Memorandum of Reply: Department of Education: The management of substitution cover for teachers

[2] Loughry College is now one of a number of campuses of DARD’s College of Agriculture, Food and Rural Enterprise (CAFRE)

[3] While there is, basically, a sound system, there are weaknesses which put some of the objectives at risk and/ or there is evidence that the level of non-compliance with some of the controls may put some of the system objectives at risk.

[4] Weaknesses in the system of control are such as to put the system objectives at risk and/or the level of non-compliance puts the system objectives at risk.

Financial Auditing and Reporting: 2003 -2004 (HC 96):
Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

Financial Auditing and Reporting: 2003 -2004 (HC 96):
Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

Appendix 1

Minutes of Proceedings of the Committee Relating to the Report

Thursday, 5 July 2007
Room 144, Parliament Buildings

Present:
Mr John O’Dowd (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr Jonathan Craig
Mr John Dallat
Mr Simon Hamilton
Mr Trevor Lunn
Mr Mitchel McLaughlin
Ms Dawn Purvis

In Attendance:
Mrs Cathie White (Assembly Clerk)
Mrs Elaine Farrell (Assistant Assembly Clerk)
Mrs Pauline Hunter (Clerical Supervisor)
Mr John Lunny (Clerical Officer)

Apologies:
Mr David Hilditch

The meeting opened at 2.01 p.m. in public session.

3. Matters arising.

2.03pm Mr Craig joined the meeting.

2.06 p.m. Mr Simon Hamilton joined the meeting.

Agreed: Members agreed that oral evidence sessions should be held for the NIAO reports ‘Use of Consultants by Northern Ireland Government Departments’, ‘The PFI Contract for Northern Ireland’s New Vehicle Testing Facilities’ and ‘Into the West (Tyrone and Fermanagh) Ltd: Use of Agents’.

Agreed: Members agreed that the remaining reports would be dealt with in Committee Composite Reports.

4. Draft forward work programme.

Members discussed a memorandum of response, namely Department for Social Development: Housing the Homeless.

Agreed: Members agreed to defer this to September 2007.

[EXTRACT]

Thursday, 13 December 2007
Room 144, Parliament Buildings

Present:
Mr John O’Dowd (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr Mickey Brady
Mr Jonathan Craig
Mr John Dallat
Mr Simon Hamilton
Mr David Hilditch
Mr Patsy McGlone
Mr Mitchel McLaughlin
Ms Dawn Purvis

In Attendance:
Mrs Cathie White (Assembly Clerk)
Mrs Gillian Lewis (Assistant Assembly Clerk)
Mrs Nicola Shephard (Clerical Supervisor)
Mr Michael Johnston (Clerical Officer)

Apologies:
Mr Trevor Lunn

The meeting opened at 2.00pm in public session.

2.19pm Mr McGlone left the meeting.

2.23pm The meeting went into closed session.

6. Consideration of the Accounting Officers’ update on the Memorandum of Response: Control of River Pollution in Northern Ireland.

Members noted the updates from Dr Malcolm McKibbin, Accounting Officer, Department of Agriculture and Rural Development (DARD), and Mr Stephen Peover, Accounting Officer, Department of the Environment (DOE). Members received briefing on the updates from Mr John Dowdall CB, C&AG, Mr Eddie Bradley, Director of Value for Money, Ms Ursula Moyna, Audit Manager and Mr Joe Campbell, Audit Manager.

Agreed: Members agreed that Mr Stephen Peover, Accounting Officer, DOE, would be asked to provide further information.

8. Composite Report

Members considered responses to the Committee’s questions received from Accounting Officers in relation to NIAO reports on which it would not be taking oral evidence.

Agreed: Members agreed to ask for further information from the Accounting Officer, DARD, in relation to the NIAO report ‘Failure of Processing and Marketing grant applicants to follow procurement rules’.

Agreed: Members agreed that the response from the Accounting Officer, Department of Health, Social Services and Public Safety, would be included in the Committee’s report.

Agreed: Members agreed to ask for further information from the Accounting Officer, DCAL, in relation to the NIAO report ‘Electronic Libraries for Northern Ireland’.

[EXTRACT]

Thursday, 28 February 2008
Room 144, Parliament Buildings

Present:
Mr John O’Dowd (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr Jonathan Craig
Mr John Dallat
Mr Simon Hamilton
Mr David Hilditch
Mr Ian McCrea
Mr Mitchel McLaughlin

In Attendance:
Mr Jim Beatty (Assembly Clerk)
Mrs Gillian Lewis (Assistant Assembly Clerk)
Mrs Nicola Shephard (Clerical Supervisor)
Mr Ricky Shek (Clerical Officer)

Apologies:
Mr Trevor Lunn
Mr Patsy McGlone
Ms Dawn Purvis

The meeting opened at 2.00pm in public session.

3. Matters arising.

The Committee noted correspondence from the Accounting Officer, Department of the Environment, providing further information in relation to the Memorandum of Response (MOR): Control of River Pollution in Northern Ireland.

Agreed: Members agreed that they would raise some issues of concern with the Accounting Officer at a future evidence session and in the meantime NIAO would keep the matter under review.

[EXTRACT]

Thursday, 4 September 2008
Room 144, Parliament Buildings

Present:
Mr Paul Maskey (Chairperson)
Mr Roy Beggs (Deputy Chairperson)
Mr John Dallat
Mr Trevor Lunn
Mr Mitchel McLaughlin

In Attendance:
Mr Jim Beatty (Assembly Clerk)
Mrs Gillian Lewis (Assistant Assembly Clerk)
Mr John Lunny (Clerical Supervisor)
Mr Darren Weir (Clerical Officer)

Apologies:
Mr Simon Hamilton
Mr David Hilditch
Ms Dawn Purvis

The meeting opened at 2.08pm in public session.

2.30pm The meeting went into closed session.

7. Consideration of the Committee’s Draft First Composite Report.

Members considered the draft report paragraph by paragraph.

The Committee considered the main body of the report.

Paragraphs 1 – 9 read and agreed.

Paragraph 10 read, amended and agreed.

Paragraphs 11 – 15 read and agreed.

Agreed: Members agreed to ask for a written update of the statistical information provided by the Department of Health, Social Services and Public Safety on Incorrect Claims for Exemption from Health Service Charges and whether the target date for the roll out of the Electronic Prescribing and Eligibility System had been met.

Agreed: Members agreed to obtain a briefing on the outworking of the Welsh system of free prescriptions.

Paragraphs 16 – 22 read and agreed.

Paragraphs 23 – 26 read, amended and agreed.

Paragraphs 27 - 31 read and agreed.

Paragraph 32 read, amended and agreed.

Paragraphs 33 – 40 read and agreed.

Paragraph 41 read, amended and agreed.

Paragraphs 42 – 51 read and agreed.

Paragraph 52 read, amended and agreed.

Paragraphs 53 – 55 read and agreed.

The Committee considered the Executive Summary.

Paragraphs 1 – 6 read and agreed.

Agreed: Members ordered the report to be printed.

Agreed: Members agreed that the Chairperson’s letters requesting information to the Accounting Officers, Department of Education, Department of Health, Social Services and Public Safety, Department of Agriculture and Rural Development, Department for Social Development, Department of Culture, Arts and Leisure, and Department for the Environment, and their responses would be included in the Committee’s report.

Agreed: Members agreed to embargo the report until 00.01am on Thursday, 25 September 2008, when the report would be officially released.

Agreed: Members agreed not to hold a press conference on Thursday, 25 September 2008 to launch the Committee’s report.

[EXTRACT]

Appendix 1

Correspondence

(a) Financial Auditing and Reporting: 2003-3004 (HC 96): Accountability to Parliament by Education and Library Boards

(b) Financial Auditing and Reporting: 2003-2004 (HC 96): Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

(c) Financial Auditing and Reporting 2004-2005 (HC 1199): Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rules

(d) Financial Auditing and Reporting: 2004 -2005 (HC 1199): Department for Social Development: Resource Account 2004-05

(e) The Private Finance Initiative: Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

(f) Memorandum of Reply: Department of Social Development: Housing the Homeless (CM 6283)

(g) Memorandum of Reply: Control of River Pollution in Northern Ireland (NIA 51/00)

Section A

Financial Auditing and Reporting: 2003-3004
(HC 96): Accountability to Parliament by Education and Library Boards

Chairperson’s letter of 10 September 2007 to Mr Will Haire

NIA Logo

Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 10 September 2007

Mr Will Haire
Accounting Officer
Department of Education
Rathgael House
Balloo Road
Bangor
BT19 7PR

Dear Will

NIAO Report - Financial Auditing and Reporting: 2003 – 2004
General Report by the Comptroller and Auditor General for Northern Ireland (HC 96)
Accountability to Parliament by Education and Library Boards

The Committee has requested that I ask you to provide written evidence in relation to accountability to Parliament and financial control by Education and Library Boards.

The Committee has a number of questions as follows:

1. As highlighted in NIAO Report “Financial Auditing and Reporting 2004-05”, there have been problems with the timeliness and quality of the Education and Library Boards’ (ELBs) accounts. Is the Department satisfied that there are robust arrangements in place to ensure that the 2007-08 accounts will provide the sound financial information needed for the successful restructuring of the sector?

2. The Committee has noted in the NIAO Report “Financial Auditing and Reporting 2004-05”, that BELB and SEELB had accrued deficits of £10.8 million and £21.6 million (later adjusted to £8.5 million and £24.2 million respectively. The Committee would like an update progress against targets for 2005-06, 2006-07 and 2007-08 (projected)? In addition, please provide details of where savings have been made within each of the Board’s budgets?

3. Para. 34, 2004-05 – The C&AG reported that a good measure of ELBs’ budgetary control systems would be whether they provided reasonably accurate forecasts of the out-turns reported in audited financial accounts. What is the Department’s assessment of the accuracy of budgetary out-turns at 31 March 2006 and 2007?

4. Para. 25 – 27, 2004-05 – The consultants appointed by the Department to review the ELBs’ budgeting, accounting and financial control arrangements highlighted the adverse effects of cultural issues relevant to financial relationships. What has the Department done to change the culture in ELBs and to make sure there is a culture of robust financial discipline in the ESA from the outset?

I would be grateful if we could have your response by Friday, 5 October 2007.

Yours sincerely

John O'Dowd Signature

John O’Dowd
Chairperson

Correspondence of 12 October 2007 from Mr Will Haire

Mr John O’Dowd MLA
Chairperson
Public Accounts Committee
Parliament Buildings
Room 371
Stormont
Belfast
BT4 3XX 12 October 2007

Dear John

NIAO Report – Financial Auditing and Reporting: 2003-04
General Report by the Comptroller and Auditor General for Northern Ireland (HC 96)

Accountability to Parliament by Education and Library Boards

Thank you for your letter of 10 September, on behalf of Public Accounts Committee, seeking written evidence in response to a number of questions raised by the Committee in relation to accountability to Parliament and financial control by Education and Library Boards in the context of the above report.

Details of the information requested is set out in the attached Annex. For ease of reference the specific questions are replicated in the order of your letter followed by a summary of evidence requested in relation to each question. Where necessary this has also been supplemented with additional information in the form of appendices.

I trust that the Committee finds this helpful.

Yours sincerely

Will Haire

Question 1

As highlighted in NIAO Report “Financial Auditing and Reporting 2004-05”, there have been problems with the timeliness and quality of the Education and Library Boards’ (ELBs) accounts. Is the Department satisfied that there are robust arrangements in place to ensure that the 2007-08 accounts will provide the sound financial information needed for the successful restructuring of the sector?

It is acknowledged that the change to resource accounting brought with it significant changes in both the presentation and accounting treatment of funding by ELBs in their annual accounts. This contributed to delays in prior year accounts as acknowledged in previous reports by the C&AG.

The need to ensure that there is accounting expertise within the Boards has been an issue which the Department has been emphasising to them, and has been monitoring closely. To ensure that the Department itself can carry out this oversight role we have enhanced substantially the level of accounting expertise within both the sponsor branch of the ELBs and within the Department’s Finance Division. The appointment of a professionally qualified Finance Director in 2006 has augmented this skills base further. This approach has allowed dedicated resources to be utilised in taking forward the outstanding accounting and reconciliation issues, in conjunction with ELBs and NIAO, and allowed all previous outstanding ELB accounts to be completed.

At October 2007 the only outstanding audit certificates relate to the 2006/07 financial year. The target date for completion of the 2006/07 audit is 31 October 2007. A slight delay is anticipated in respect of the completion of the audits for 2006/07 due to the need to adjust for disclosure requirements in respect of the treatment of capital funding. The Department has been liaising with ELBs and NIAO to expedite this change to ensure that the delay in the completion of the audit is marginal.

Planning for the completion of the 2007/08 has already commenced. The work required to be undertaken by ELBs this year is more extensive than in previous years due to the need to:

In recognition of this the Department is currently:

Whilst year end accounts provide a view of the financial position at a fixed point in time this must be supplemented by additional management accounting information and it is this information which will be critical in facilitating successful restructuring of the sector. To ensure that the necessary financial information is available to allow for this, the Department, led by the Finance Steering Group within the DE RPA Programme - Finance and Accounting workstream is currently progressing work to ascertain the additional management accounting information required as this will be used to make future decisions on:

There is substantial work ahead to allow for the completion of accounts to the required standard and completion of the development work to permit the financial benefits of restructuring to be maximised.

In addition, with the ESA Implementation Team which is overseen by Gavin Boyd, Chief Executive Designate of the ESA, a Financial Planning project under Shane McCurdy and a Financial and Accounting project under Hilary McVitty have been established to ensure effective planning across the Boards and other organisations involved in the RPA.

It is recognised that because of the resource pressures this will place on ELB structures there is a risk that the Boards may not be adequately resourced/skilled to produce statutory accounts to the required standard. This has been reflected within the Department’s risk register for the RPA Programme. In recognition of this the Department is, and will continue to, monitor the ability of Boards’ to maintain effective service delivery in all aspects of their activities, including adherence to the requirements of the Accounts Direction issued by the Department.

Question 2

The Committee has noted in the NIAO Report “Financial Auditing and Reporting 2004-05” that BELB and SEELB had accrued deficits of £10.8million and £21.6million (later adjusted to £8.5m and £24.2 million respectively). The Committee would like and update progress against targets for 2005-06, 2006-07 and 2007-08 (projected). In addition, please provide details of where savings have been made within each of the Board’s budgets?
BELB – Progress Against Targets (DQ: insert new information)

The following table provides a summary of the progress by the BELB against repayment targets and the projected deficit position at 31 March 2008.

Year

Target
Repayment
£m

Achieved

Value of Deficit
at year end

£m

Balance

n/a

n/a

8.5#

2005/06

3

Yes

6.2*

2006/07

3

Yes

3.2

2007/08

3.2

Current projections indicate on target for achievement.

0

Notes:

# £8.5m deficit at 31 March 2005. Although relating to overspends on both Schools and Centre budget this has been reported as one figure as total repayment is due to the Department.

* This figure has been adjusted to reflect an error in respect of end of year flexibility relating to deferred income in the 2005-06 accounts.

Repayment of deficit for BELB in respect of 2007/08 will be provided for in the last quarter of the financial year, during the Resource Allocation Planning (RAP) process.

SEELB – Progress Against Targets

The following table provides a summary of progress by the SEELB against repayment targets and the projected deficit position at 31 March 2008.

Year

Target Repayment
£m

Achieved

Value of Deficit
at year end

Schools
£m

Centre
£m

Total
£m

Balance

n/a

n/a

11.9

12.3

24.2#

2005/06

4.5 (iro Centre)

Repayment to Centre not achieved but £4.1m of schools deficit repaid.

7.8

12.3

20.1*

2006/07

4.5 (iro Centre)

Yes

7.8

7.8

15.6

2007/08

3.2 (2.1 iro Centre and 1.1 to Schools).

Current projections indicate on target for achievement.

5.7

6.7

12.4

Notes:

# £24.2m deficit at 31 March 2005.
*SEELB was unable to make repayment in respect of Centre as the drawdown of surpluses by schools had priority in the utilising funds.

Repayment of deficit for SEELB in respect of 2007/08 will be provided for in the last quarter of the financial year, during the Resource Allocation Plan (RAP) process.

Budget Savings

It is not possible to quantify savings precisely against each element of the ELB budget as year on year, budget management and levels of expenditure reported will be affected by a number of changing variables. For example, changes in classification of budget types, impact of non-recurring events eg: redundancy programmes and availability of one-off budget allocations for specific purposes. Budgets made available to each ELB are also affected by changes in volumetric data eg: pupil numbers. All of the above factors must therefore be considered by BELB and SEELB in establishing how it will live within budget but also make repayments to the Department.

Whilst it is not possible to separately identify savings against a common baseline it is possible to identify actions taken by each ELB to allow repayments to be made. These are summarised below.

Belfast Education & Library Board - Savings

The key areas where savings have been achieved are outlined below.

Aggregated Schools Budget/LMS Savings

The Board has worked closely with schools to influence the appropriate financial actions to help the schools move to an improved budget position. To achieve savings schools have taken various forms of action including teacher redundancies, non-teaching redundancies, composite classes, and closure of some schools. The key outcome of all of these measures has been the reduction in the ASB cumulative deficit position.

Schools Non - Delegated Savings

Teacher Substitution Costs for Mainstream Schools

It is the schools responsibility to manage teacher sickness rather than the Board. To assist schools in managing sickness and absence at work, the Board updated its sickness and absence policy and provided training for principals. Costs have only fallen marginally in this area as the sector goes through a period of change.

Special Education in Mainstream

Special Education in Mainstream Schools is for teachers in special units, classroom assistants and other support staff for children with special needs in mainstream education. The Board has reviewed its procedures to ensure that classroom assistants in mainstream schools are assigned to statemented children only when the child has been statemented by a psychologist. Better controls are in place to take action to remove a classroom assistant whenever a child leaves the school.

Landlord Maintenance

This is an area that has been the most significant area of goods and services savings. Most planned maintenance has ceased (except key equipment and certain grass cutting). Response maintenance is relates only to emergencies and health and safety issues.

Services to Schools – Centre Savings

Teacher Substitution Costs for Centre Services

The Board tries to ensure that sickness is kept to a minimum through the sickness/absence management policy. The implementation of the new sickness/absence policy has provided some savings as it is not going through the same level of changes as mainstream education. As will all other Board services, the training for teachers has been reduced.

CASS

CASS has made a number of savings due to the closure of the Drumalla out centre facility. A number of voluntary redundancies have been actioned (advisors and administration) freeze on posts, increase in the rates charged by the School of Music, and other services making use of the Ulidia teachers centre.

School Library Service

Savings have been made in this area as a result of a shared service with the SEELB. The shared service enabled voluntary redundancies to take place. The shared school library service was relocated to Ulidia teachers centre.

Special Schools

The special schools service represents about a third of the centre services budget. Steps have been made to make savings through voluntary redundancies in administration. Savings were made due to the freeze on appointments.

A number of processes in the service were reviewed and improvements introduced; this has allowed expenditure to be controlled more stringently.

Pupil Services

Savings have been made in pupil services through voluntary redundancies and temporarily vacant posts.

Headquarters

Headquarters was targeted for significant savings during the repayment period to minimise the impact on front line services. The savings have been made through voluntary redundancy, a freeze on vacant posts, agency staff being removed, a stop on courses and conferences, postage changed to only 2nd class, frequency of job advertising reduced and re-using of paper. The reprographics department has also been increasing the income that it generates. The voluntary redundancies have been across the range of services in Headquarters. Some of the redundancies have been facilitated through shared services with the SEELB (Health & Safety Officer, Legal Services). Other areas are being considered.

SEELB - Savings Identified

The key areas where savings have been achieved are outlined below.

Services to Schools – Centre Savings

CASS

Expenditure has been reduced in this area via the reduction of overall staffing numbers and giving remaining staff responsibility for a range of initiatives in a school.

School Catering

Expenditure has decreased in this area as a result of ensuring that school meals are delivered as economically as possible, while continuing to maintain acceptable standards i.e. through reducing the hours of catering staff, not filling vacant posts, and limiting any new/replacement equipment purchases.

Maintenance

Very significant savings have been made in this area by restricting the maintenance programme to essential health and safety maintenance only.

Headquarters

Savings have been achieved through voluntary redundancy, a freeze on vacant posts, agency staff being removed, a stop on courses and conferences, postage changed to only 2nd class, frequency of job advertising reduced and re-using of paper. Some of the redundancies have been facilitated through shared services with the BELB (Health & Safety Officer, Legal Services).

Special schools and administration of Special Education

Expenditure has decreased in this area, as a result of falling numbers in Special schools and a reduction of staff employed in Headquarters.

Transport

Savings have been achieved by reviewing all routes, withdrawal of concessionary transport and rigorous application of policies in the area of exceptional transport.

School libraries

Savings have been realised in this area, as a result of implementing a shared service with the Belfast Board. The shared service enabled voluntary redundancies to take place. The shared school library service was relocated to Ulidia teachers centre. DE provided funding to enable the shared service to happen.

Education welfare

Savings have been realised as a result primarily of being unable to recruit Education and Welfare Officers.

Road safety

Small savings have been achieved by removing some crossing patrols and removing lunchtime provision.

Question 3

Para. 34, 2004-05 – The C&AG reported that a good measure of ELBs’ budgetary control systems would be whether they provided reasonably accurate forecasts of the out-turns reported in audited financial accounts. What is the Department’ assessment of the accuracy of budgetary out-turns at 31 March 2006 and 2007.

The Department receives reports summarising the year to date expenditure and forecast out-turn from each ELB. Based on final reports received prior to the year end the forecast out-turns provided in these reports show only a marginal variation on the out-turns reported in the financial accounts in respect of both the 2005-06 and 2006-07 years. Details are provided in the summary table below. Whilst final expenditure reports show accurate forecasts, earlier forecasts were slow to recognise the potential extent of unused resources. Due to limitations on access to End of Year Flexibility in respect of the 2006-07 financial year the position is not expected to be repeated in 2007-08.

Comparison of Final Management Financial Information with Audited Budgetary Outturn for 2005-06 Financial Year.

ELB

Final Outturn (audited)

Estimated
Outturn*

Variance

% Variance

( a )
£’000

( b )
£’000

( c ) = ( b )-( a )
£’000

( d ) = ( c ) / ( b)

BELB

207,158

208,569

1,411

0.68%

NEELB

262,841

262,743

(98)

(0.04)%

SEELB#

238,457

238,230

(227)

(0.10)%

SELB

277,660

277,469

(191)

(0.07)%

WELB

279,043

279,325

282

0.10%

Total

1,265,159

1,266,336

1,177

0.09%

Notes:

* Figures taken from final monthly finance reports submitted to the Department by ELBs and include recurrent expenditure for Schools and Youth budgets.

# Whilst the change in overall expenditure for SEELB in 2005/06 was marginal there was a more significant variation of forecast and actual expenditure of Schools. As a result, Centre repayment of £4.5m could not be made but £4.1m of Schools deficit was repaid, as SEELB had to cover the cost from sums set aside for Centre.

Comparison of Final Management Financial Information with Audited Budgetary Outturn for 2006-07 Financial Year.

ELB

Outturn Per Draft Accounts (Unaudited)

Estimated
Outturn*

Variance

% Variance

( a )
£’000

( b )
£’000

( c ) = ( b )-( a )
£’000

( d ) = ( c ) / ( b)

BELB

210,543

213,048

2,505

1.18%

NEELB

267,479

266,363

(1,116)

(0.42)%

SEELB

239,111

239,750

639

0.27%

SELB

283,730

285,328

1,598

0.56%

WELB

280,683

282,225

1,542

0.55%

Total

1,281,546

1,286,714

5,168

0.40%

Notes:

Figures taken from final monthly finance reports submitted to the Department by ELBs and include recurrent expenditure for Schools and Youth budgets.

Question 4

Para. 25 – 27, 2004-05 – The consultants appointed by the Department to review the ELBs’ budgeting, accounting and financial control arrangements highlighted the adverse effects of cultural issues relevant to financial relationships. What has the Department done to change the culture in ELBs and to make sure there is a culture of robust financial discipline in the ESA from the outset?

The priority afforded to financial control within the education sector has increased significantly since the identification of overspends by BELB and SEELB. As highlighted within the NIAO report, the Department appointed a firm of consultants to review the ‘Resource Budgeting, Accounting & Financial Control, Monitoring and Reporting Arrangements’ within Education & Library Boards. The report highlighted a number of weaknesses in this area and made a number of recommendations, which if successfully implemented would improve financial control across the Boards’.

The Department has played an active role in taking forward the issues outlined in the consultants report via the establishment of a working group (Helm Steering Group) comprising representatives from each of the ELBs and from other sponsor departments. Significant progress has been made in implementing the recommendations of Helm and outstanding issues will be progressed through the RPA Programme - Finance and Accounting workstream.

In summary, 17 recommendations were made. Progress has been made as follows:

Outcome

Notes:

7 Achieved

Implemented

8 Partially Achieved

Outstanding issues iro of these targets are being progressed by the RPA Programme.

2 Not Achieved

One to be pursued via the RPA Programme.

One not being pursued but risk being monitored.

Full detail is provided at Appendix 1.

In respect of the implementation of those recommendations partially or not achieved it was recognised from the outset that creation of the new Education & Skills Authority would provide an ideal opportunity to fundamentally improve the overall quality and cultural aspects of financial management within the sector given existing system limitations and skills shortage within the sector. These issues are being considered in current development work within the RPA Programme - Finance and Accounting workstream.

As a consequence the Department has continued to focus on other aspects of enhancing the focus on financial management and accountability in the sector as follows:

Financial Monitoring

Planned expenditure programmes, against budget allocations, are submitted to the Department at 3 key stages throughout the year. These are assessed both by the primary sponsor branch and policy branches to ensure that plans align with budgets and departmental priorities. For those Boards in deficit additional scrutiny is given to the ability of each to live within budget but also make repayment. This has resulted in the need for departmental/ministerial intervention on 2 occasions to ensure that expenditure plans were either approved or the necessary support for officials to seek agreement to plans was in place to meet statutory obligations.

Increasing pressure on the NI Block has limited the scope for additional funds to be made to all sectors. Nonetheless, bids are now scrutinised by the primary sponsor branch and must be supported by robust supplementary evidence confirming need. Within this framework only those bids that are deemed inescapable and give rise to an in year commitment will be considered. This limits the scope of increases to the budgets in year which were cited as a contributory factor to prior year overspends.

Increased focus on monitoring now takes place with monthly expenditure reports submitted to the Department. These are scrutinised and whilst some further development is required to allow for consistency in the standard of reporting this information will allow for improved management in the use of the wider Education Budget in both current and future years by identifying any further additional pressures and easements.

This year the Department has also undertaken detailed analysis of end of year flexibilities and has reiterated during this process of the need for all profiled expenditure to reflect committed expenditure in reporting financial performance.

Financial Reporting

In respect of Statutory Accounts, the Boards have been largely successful in the implementation of the phased approach to implementation the Faster Closing initiative, with both the format and quality of Statutory Accounts submitted to NIAO having improved.

The improvement in both financial monitoring and reporting are a positive indication of the priority afforded to robust financial discipline.

Corporate Governance - Audit and Risk Committees

Developments in corporate governance have allowed for the transparency and risks associated with all objectives to be considered in a more robust and structured way. The Department now attends the audit committee meetings of all sponsored NDPBs at regular intervals where input can be provided on financial accountability issues if required.

Corporate Governance - Accountability Review Meetings

The level of priority afforded to and, the need for, sound Financial Control is regularly communicated to the Board Accounting Officers’ through 6 monthly formal Accountability Review meetings. These provide a forum for discussing a range of accountability issues, including those of financial performance, in a frank and open manner. For those ELBs in deficit meetings had been held on a monthly basis. However, during this financial year these are continuing only for SEELB given the level of repayment already made by BELB.

Financial Memorandum/Management Statement

The Department has developed a revised draft Management Statement and Financial Memorandum for Education & Library Boards’. Feedback has recently been received from both the Boards and DFP and comments are currently being reviewed. It is anticipated that the full content of this document can be agreed in the near future and its implementation will provide for a clearer basis as to financial responsibilities and accountability relationship between the Boards’ and the Department pending the establishment of ESA.

Relationships between the Department and ELBs.

The Department has enhanced the profile and level of engagement with Boards on a range of finance and accounting issues. These have included holding workshops for key finance staff to identify and agree upon critical issues in respect of both changes to accounts format and policy issues. Due to increased staffing within the sponsor branch attendance at Chief Finance Officer and Assistant Finance Officer meetings are now regularised. This will be important in progressing financial reporting and management issues in respect of the development of ESA.

RPA Programme

In moving to the new Education & Skills Authority, the Department has established two Finance and Accounting projects under the RPA programme, one within the Department and one within the Education & Skills Authority Implementation Team (staffed, in part, by ELB staff on secondment) to ensure that financial management issues are appropriately identified, planned for and effectively implemented in the establishment of the new Authority. A number of packages of work have been identified within the projects as being critical to enhancing the financial management culture within the education sector, these are currently being taken forward and include;

Work in these areas has commenced and progress will be carefully monitored as the date for ESA implementation approaches. Progress in the areas identified should provide the basis for a culture of sound financial management within the new organisation.

Appendix 1
Summary of Implementation of Helm Recommendations

No

Recommendation

Successful Outcome

Outcome

1

Corporate and Business Plans with indicative high-level budget figures linked to objectives presented to Board and Department.

Publication of 3-year plan and its dissemination to Board members.

Partially achieved. Outstanding issues being progressed via RPA Programme.

2

Business case should be developed to identify best procurement system in terms of application and systems integration and should be rolled out across all 5 ELBs.

Agreed systems and an implementation timetable in place to have the systems rolled out within a 1-year timeframe.

Partially achieved. Outstanding issues being progressed via RPA Programme.

3.

Governance arrangements for IT projects should be evaluated against internationally recognised framework for IT governance.

Presentation of report to ELBs and Departments.

Partially achieved. Outstanding issues being progressed via RPA Programme.

4.

The Department in conjunction with Education and Library Boards and the NIAO should urgently arrange for certification of outstanding final accounts.

Statutory accounts certified and laid before Parliament.

Achieved.

5.

Establishment of project team to review format of Statutory accounts (segmental reporting and a transparent and understandable I&E account).

Statutory accounts to reflect the revised format.

Achieved.

6.

Accounts closure Workshop involving DE and all five ELBs regarding the treatment of items in the accounts (EYF, deferred income, departmental debtor etc) including preparation of a manual.

Completion of a manual by 2007.

Achieved.

7.

In-Board approval of Statutory accounts should include approval by SMT and each ELB’s internal audit and finance committee prior to submission.

Accounts to be presented on the due date and require no further amendments.

Achieved.

8.

Review Budget setting process and yearly business plan to ensure it meets best practice and is aligned with the corporate planning process.

Presentation to Board and submission of RAP to Departments.

Not achieved. Outstanding issues being progressed via RPA Programme.

9

Indicative Budget figures for FY 2006/2007 by service line (per the RAP) broken down by individual budget-holder

Budget-Holders and Board members have the prospective FY budget by end December 2005

Partially achieved. Timetabling issues on future years being progressed via RPA Programme.

10.

Management accounts presented to SMT, Finance Committees and Department at the very least to include high-level accruals

All Monthly accounts from P1 onwards should have high-level accruals for each budget holder

Partially achieved. Outstanding issues being progressed via RPA Programme.

11.

Standardisation of Management Accounts that are presented to the SMT/Finance Committees and the Department. SMT to minute and follow-up on action to remedy variances

Monthly management accounts are in the same format for all 5 ELBs

Partially achieved. Outstanding issues being progressed via RPA Programme.

12.

Finance Committee meetings to be programmed to discuss previous month’s accounts. Service committees to be involved in discussing budgetary position of the service line

All 5 ELBs are compliant

Achieved.

13.

The content and frequency of reports returned monthly to the sponsoring Departments needs to be revised.

All 5 ELBs are compliant

Partially achieved. Outstanding issues being progressed via RPA Programme.

14.

Review of qualified staffing resources in Board Finance Departments

Presentation of Report to ELBs

Not Achieved. Not progressed given recognised constraints within ELBs and skills shortage in this sector. Risk acknowledged and being managed.

15.

Review of potential for a Shared Service Model in relation to Financial Management

Presentation of Report to ELBs

Partially achieved. Outstanding issues being progressed via RPA Programme.

16.

Preparation of a plan to achieve early implementation of recommendations

Presentation of plan to steering group

Achieved.

17.

A programme of training specifically designed to cover resource accounting and budgeting should be delivered to SMT and Board members

Training programme implemented

Achieved.

Chairperson’s letter of 17 September 2007 to Mr Will Haire

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Public Accounts Committee
Parliament Buildings
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BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 17 December 2007

Mr Will Haire
Accounting Officer
Department of Education
Rathgael House
Balloo Road
Bangor
BT19 7PR

Dear Will

NIAO Report - Financial Auditing and Reporting: 2003 – 2004
General Report by the Comptroller and Auditor General for Northern Ireland (HC 96)
Accountability to Parliament by Education and Library Boards

Thank you for your response of 12 October to the Committee’s request for written evidence in relation to accountability to Parliament and financial control by Education and Library Boards.

This information will be included in the report which the Committee will publish in due course.

Yours sincerely

John O'Dowd Signature

John O’Dowd

Chairperson

Section B

Financial Auditing and Reporting: 2003-2004
(HC 96): Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

Chairperson’s letter of 10 September 2007 to Dr Andrew McCormick

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Public Accounts Committee
Parliament Buildings
Room 371
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BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 10 September 2007

Dr Andrew McCormick
Accounting Officer
Department of Health, Social Services & Public Safety
Room C5.11
Castle Buildings
Stormont
Belfast
BT4 3SQ

Dear Andrew

NIAO Report - Financial Auditing and Reporting: 2003 – 2004
General Report by the Comptroller and Auditor General for Northern Ireland (HC 96)
Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

The Committee has requested that I ask you to provide written evidence in relation to the incorrect claims for exemption from Health Service charges.

The Committee has a number of questions as follows:

1. For a number of years, the accounts of the Health Boards, and until 2004-05 the resource account, have been qualified because of the significant lost income from patients claiming exemption from having to pay statutory prescription and other charges, which they are entitled to claim. The loss was calculated the loss in 2004-05 to be £9.2 million. Although this loss has been reducing, this is still a very high loss of income to the health service. Please provide comments on this and what £9.2 million would mean to the further reduction of waiting lists and waiting times.

2. How many prescriptions were dispensed in each of the last 5 years, and how many attracted a charge? Of the latter, how many charges were paid? As Accounting Officer, what conclusions have you drawn as to why charges were not paid?

3. What is the claimed exemption rate in Northern Ireland, and how does this compare with England, Wales and Scotland? If it is higher, why should this be so? Has the Health Service identified any “hot spots” where claimed exemption rates are higher, and what is the cause of this? Has the Health Service taken any action to target these areas in an attempt to encourage compliance with the regulations?

4. In the past 5 years, how many new drugs on the market has the Health Service not been able to support through funding, due to funds not being available? In respect of each, what would have been the estimated annual costs to ensure that those drugs reached the patients who would have benefited from them?

5. What is the total cost of administering the prescription-charging policy, including that spent on collection of income, the identification and analysis of non-payers, and of action taken to seek payment through legal and other follow-up? Is there anything else that the Health Service could do?

6. How many fixed penalties has the Health Service given and how much have you been able to recover in each of the last 5 years? Has the Health Service been able to put this income into use?

7. The Committee notes from a recently published NIAO report, that the Health Service is introducing an Electronic Prescribing and Eligibility System in September 2007. What is this intended to do, and how does the Health Service expect it to assist in reducing exemption fraud? When will it be fully operational?

I would be grateful if we could have your response by Friday, 5 October 2007.

Yours sincerely

John O'Dowd Signature

John O’Dowd
Chairperson

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Correspondence of 5 October 2007 from Dr Andrew McCormick

Chairperson’s letter of 17 September 2007 to Dr Andrew McCormick

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Public Accounts Committee
Parliament Buildings
Room 371
Stormont
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BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 17 December 2007

Dr Andrew McCormick
Accounting Officer
Department of Health, Social Services & Public Safety
Room C5.11
Castle Buildings
Stormont
Belfast
BT4 3SQ

Dear Andrew

NIAO Report - Financial Auditing and Reporting: 2003 – 2004
General Report by the Comptroller and Auditor General for Northern Ireland (HC 96)
Department of Health, Social Services and Public Safety – Incorrect Claims for Exemption from Health Service Charges

Thank you for your response of 5 October to the Committee’s request for written evidence in relation to accountability to Incorrect Claims for Exemption from Health Service Charges.

This information will be included in the report which the Committee will publish in due course.

Yours sincerely

John O’Dowd
Chairperson

Section C

Financial Auditing and Reporting 2004-2005 (HC 1199):
Department of Agriculture and Rural Development – Failure of Processing and Marketing
grant applicants to follow procurement rules

Chairperson’s letter of 10 September 2007 to Dr Malcolm McKibbin

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Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 10 September 2007

Dr Malcolm McKibbin
Accounting Officer
Department of Agriculture and Rural Development
Dundonald House
Upper Newtownards Road
Belfast
BT4 3SB

Dear Malcolm

NIAO Report - Financial Auditing and Reporting: 2004 – 2005
General Report by the Comptroller and Auditor General for Northern Ireland (HC 1199)
Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rules

The Committee has requested that I ask you to provide written evidence in relation to the failure of processing and marketing grant applicants to follow procurement rules.

The Committee has a number of questions as follows:

1. The report noted that in a substantial number of cases there was insufficient evidence available to prove that the required procurement procedures had been adhered to in relation to the Processing and Marketing grants. Paragraph 7 of the report outlined key lessons arising. These included:

Please outline what actions the Department has taken to ensure these lessons have been fully addressed.

2. The report noted that the Department should perform and apply appropriate checks in its reviews of grant claims, particularly where the required procurement procedures have not been carried out. Written evidence should be retained to record the results of the challenge.

Can you outline what checks the Department has undertaken? Please also indicate what proportion of grant applicants currently claim that proper procurement procedures could not be met.

Has the Department withheld or reclaimed any grant already paid, where there was no satisfactory explanation for a lack of quotations or tendering?

3. The Department commented in paragraph 9 of the report that it was revising the scheme to explicitly recognise the exceptional circumstances in which tenders may not be required, and setting out evidence which must be retained on file to support the approval of such cases.

Please confirm that the scheme has been revised accordingly.

4. In paragraph 9 the Department stated that it would require all beneficiaries to produce tender documentation for a selected sample of five per cent of expenditure items included in each claim.

Please confirm that the Department has undertaken these samples and indicate when they commenced. Please provide statistics on the number of samples selected, error rates found and actions taken.

5. Have the lessons learnt as a result of this report been disseminated across the other grant schemes administered by the Department?

I would be grateful if we could have your response by Friday, 5 October 2007.

Yours sincerely

John O'Dowd Signature

John O’Dowd
Chairperson

Section C

Financial Auditing and Reporting 2004-2005
(HC 1199): Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rules

Correspondence of 4 October 2007 from Dr Malcolm McKibbin

Correspondence of 4 October 2007 from Dr Malcolm McKibbin

Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rules
The Committee’s questions are listed below, with departmental responses in bold type.

1. The report noted that in a substantial number of cases there was insufficient evidence available to prove that the required procurement procedures had been adhered to in relation to the Processing and Marketing grants. Paragraph 7 of the report outlined key lessons arising. These included:

Please outline what actions the Department has taken to ensure these lessons have been fully addressed.

Response:

In September 2005 DARD issued a letter to all existing processing and marketing grant recipients which outlined that a number of areas of concern in relation to procurement needed to be addressed as a matter of urgency. A copy of this letter is attached at Annex 1.
The letter set out in detail the requirement to obtain competitive tenders or quotations together with the relevant financial thresholds. It made explicit the requirement for beneficiaries to fully document at the time the circumstances where it was not possible to obtain competitive tenders/quotations.
The letter also gave notice that for orders placed after 26/9/2005, the Department would require beneficiaries to submit tender documentation for a random sample of expenditure items from the grant claim, noting that PMG grant would be withheld for any item that was not supported by the required documentation as these items would be deemed ineligible. This provision also extended to similar management checks on the project premises.
The letter set out that from 26/9/2005 all PMG project expenditure had to be clearly identified within the beneficiaries accounting system. It also required an adequate audit trail of documentation from procurement to payment to asset registration was to be maintained. The letter stated that failure to comply with the terms of the letter may result in loss of EU grant aid.
All letters of offer and letters approving variation requests issued post September 2005 also included a copy of this letter.
DARD staff have also carried out follow-up visits (post September 2005) to further emphasise the need for sound procurement procedures.

2. The report noted that the Department should perform and apply appropriate checks in its reviews of grant claims, particularly where the required procurement procedures have not been carried out. Written evidence should be retained to record the results of the challenge.

Can you outline what checks the Department has undertaken? Please also indicate what proportion of grant applicants currently claim that proper procurement procedures could not be met.

Response:

All grant claims are subject to a compliance with procurement test. A sample of approximately 10% of items is taken – internal audit recommended 5%.
This involves applicants being requested to provide evidence that tendering / procurement has been carried out. Where the requisite number of quotations could not be provided, reasons must be supplied as to why this was the case. A judgement is then made by a senior member of staff on the reasons provided and, if need be, a further challenge is made. This is fully documented on file. If the reasons provided are considered sufficient the payment of grant is permitted.
Checks are also carried out in the follow areas:
Based on the 56 projects assessed to date, 8 projects claimed that they could not meet the procurement requirements for certain pieces of expenditure.

Has the Department withheld or reclaimed any grant already paid, where there was no satisfactory explanation for a lack of quotations or tendering?

Response:

Yes, a total of thirteen items of expenditure totalling £244K have been deemed ineligible due to inadequate adherence to procurement requirements.

3. The Department commented in paragraph 9 of the report that it was revising the scheme to explicitly recognise the exceptional circumstances in which tenders may not be required, and setting out evidence which must be retained on file to support the approval of such cases.

Please confirm that the scheme has been revised accordingly.

Response:

Paragraph 38 in the scheme brochure has been amended accordingly to reflect this change. As mentioned previously this change is also included in Letters of Offer issued to projects post September 2005.

4. In paragraph 9 the Department stated that it would require all beneficiaries to produce tender documentation for a selected sample of five per cent of expenditure items included in each claim.

Please confirm that the Department has undertaken these samples and indicate when they commenced. Please provide statistics on the number of samples selected, error rates found and actions taken.

In order to improve the robustness of the screening of claims for procurement compliance, the Department increased the sample to 10% from the 5% recommended. This commenced in September 2005. To date 83 claims within projects have been assessed, 13 of which were agreed as specialist purchases, a further 13 items were deemed ineligible due to inadequate procurement / reasons supplied.

5. Have the lessons learnt as a result of this report been disseminated across the other grant schemes administered by the Department?

In December 2005, a copy of the full report was circulated to all Senior Mangers (Grade 5) for circulation to staff. A covering minute instructed all managers to consider how lessons could be learnt for their respective business areas. Attention was drawn specifically to four areas; requirement for tendering procedures in all aspects of procurement, the importance of an audit trail, the inclusion of procurement procedures within Letters of Offer and the requirement for DARD to have a challenge/checking function.

Annex 1

DARD 1

DARD 2

Chairperson’s letter of 13 December 2007 to Dr Malcolm McKibbin

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Public Accounts Committee
Parliament Buildings
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Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 13 December 2007

Dr Malcolm McKibbin
Accounting Officer
Department of Agriculture and Rural Development
Dundonald House
Upper Newtownards Road
Belfast
BT4 3SB

Dear Malcolm

Re: Failure of Processing and Marketing grant applicants to follow procurement rules

Thank you for your written evidence in relation to the NIAO report on Failure of Processing and Marketing grant applicants to follow procurement rules.

The Committee at its meeting today has considered your response and has some further questions which are detailed below:

1. The Department’s response to questions 2, 3 and 4 suggests that 14% of projects tested or 31% of claims tested contained items which grant recipients have claimed as specialist purchases where they were unable to comply with procurement requirements. Can the Department:

2. Of 26 items tested which grant recipients had claimed as specialist purchases, 13 or 50% were deemed to be ineligible by the Department. Given this high percentage what impact did it have on the Department’s risk assessment in this area? What action did the Department take as a result and what consideration was given to extending testing? How does the Department intend to address the risk that the same level of potentially ineligible expenditure exists in the 90% of grant claims that have not been tested?

3. The Department’s sample letter to claimants of 15 September states “It is appreciated that some project expenditure incurred from 26 September 2005 may relate to items ordered prior to this date and the required tender documentation may not therefore be available. Provided you can demonstrate that an order was placed before 26 September 2005 such expenditure may be deemed eligible for PMG grant aid.”

What follow up action has the Department planned for items ordered before 26 September 2005, given the high proportion of specialist purchase items tested after that date which were subsequently deemed ineligible? How does the Department intend to ensure that EU regulations and the terms and conditions of Letters of Offer are applied to grants for items ordered prior to 26 September 2005?

I would appreciate a reply by Monday, 14 January 2008.

Yours sincerely

John O'Dowd

John O’Dowd
Chairperson

 

Correspondence of 11 January 2008 from Dr Malcolm McKibbin

Correspondence of 11 January 2008 from Dr Malcolm McKibbin

NIAO Report - Financial Auditing and Reporting: 2004 – 2005
General Report by the Comptroller and Auditor General for Northern Ireland (HC 1199)
Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applicants to follow procurement rule.
The Committee’s questions in the letter of the 13 December 2007 are listed below, with departmental responses in bold type.

1. The Department’s response to questions 2, 3 and 4 suggests that 14% of projects tested or 31% of claims tested contained items which grant recipients have claimed as specialist purchases where they were unable to comply with procurement requirements. Can the Department:

It is correct to say that 14% of the projects tested had specialist purchases as would be expected given the nature of the projects funded (can be innovative, involve unique technologies). However the 31% of claims tested is an incorrect interpretation of the figures provided. There were 83 claims out of which 26 items were claimed specialist – note each claim contains a number of items, and 26 only relates to specialist and ineligible, it does include all items tested.
For example of the 53 claims processed between Mar 06 to April 07, 142 items were selected, of which 12 were deemed specialist. This equates to 8.45%. Therefore the percentage of items associated as specialist is much lower.
Due to the nature of the scheme and the types of project funded there will always be items of expenditure that are specialised.
DARD has a robust challenge process in place should a project claim an item is specialist. The project must document the reasons for the item being specialised, this is then reviewed and challenged by a senior member of staff in DARD, and often referred for independent verification of its specialism by Loughry College.
A 10 % (EU recommends 5%) sample or a minimum of 3 items of all claims received are selected for assessment for compliance with tendering. In the event that there was insufficient tendering or demonstration of specialism, the item concerned is deducted from the claim and a further item selected until a 10% compliant sample is achieved.
In addition all projects receive a visit from a member of staff emphasising the need for procurement and that the terms and conditions of the letter of offer are adhered to.

2. Of 26 items tested which grant recipients had claimed as specialist purchases, 13 or 50% were deemed to be ineligible by the Department. Given this high percentage what impact did it have on the Department’s risk assessment in this area? What action did the Department take as a result and what consideration was given to extending testing? How does the Department intend to address the risk that the same level of potentially ineligible expenditure exists in the 90% of grant claims that have not been tested?

There has been a misinterpretation of the figures presented and the level of 50% ineligibility is incorrect, in fact the number of items selected for procurement testing is much higher and therefore percentage of specialist equipment much lower.
For example in the year Mar 06 to April 07 there were 142 items (from 53 claims) selected for compliance with procurement, of which 12 were deemed specialist ( 8.45%).
Claims that are received by DARD contain a number of items if expenditure. A 10% sample of the items of each claim is selected for testing for compliance with procurement. Depending on the outcome of this exercise items are then deemed specialist, or ineligible. The figure of 26 represents only those items that are specialist or ineligible, and does not include the total number of items sampled. In effect therefore the degree of ineligibility is much lower than that inferred.

3. The Department’s sample letter to claimants of 15 September states ”it is appreciated that some project expenditure incurred for 26 September 2005 may relate to items ordered prior to this date and the required tender documentation may not therefore be available. Provided you can demonstrate that an order was placed before 26 September 2005 such expenditure may be deemed eligible for PMG grant aid.”

What follow up action has the Department planned for items ordered before 26 September 2005, given the high proportion of specialist purchase items tested after that date which were subsequently deemed ineligible? How does the Department intend to ensure that EU regulations and the terms and conditions of Letters of Offer are applied to grants for items ordered prior to 26 September 2005?

DARD are currently reviewing all payments made prior to 26 September 05 and assessing the degree of compliance with respect to procurement. Those items which do not meet the procurement guidance are being recorded and will not feature in the EU drawdown

Chairperson’s letter of 4 September 2008 to Dr Malcolm McKibbin

Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366
Email: Jim.Beatty@niassembly.gov.uk

Date: 4 September 2008

Dr Malcolm McKibbin
Accounting Officer
Department of Agriculture and Rural Development
Dundonald House
Upper Newtownards Road
Belfast
BT4 3SB

Dear Malcolm

NIAO Report – Financial Auditing and Reporting: 2004 – 2005
General Report by the comptroller and Auditor General for Northern Ireland (HC 1199)
Department of Agriculture and Rural Development – Failure of Processing and Marketing grant applications to follow procurement rules

Thank you for your response of 11 January 2008 to the Committee’s request for further written evidence in relation to Failure of Processing and Marketing grant applications to follow procurement rules.

This information will be included in the report which the Committee will publish on 25 September 2008.

Yours sincerely

Paul Maskey

Paul Maskey
Chairperson

Section D

Financial Auditing and Reporting: 2004 -2005
(HC 1199): Department
for Social Development: Resource Account 2004-05

Chairperson’s letter of 10 September 2007 to Mr Alan Shannon

Public Accounts Committee
Parliament Buildings
Room 371
Stormont
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BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 10 September 2007

Mr Alan Shannon
Accounting Officer
Department for Social Development
Lighthouse Building}
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast
BT7 2JB

Dear Alan

NIAO Report - Financial Auditing and Reporting: 2003 – 2004
General Report by the Comptroller and Auditor General for Northern Ireland
(HC 96)
Northern Ireland Child Support Agency Client Funds Account 2003-04
NIAO Report - Financial Auditing and Reporting: 2004 – 2005
General Report by the Comptroller and Auditor General for Northern Ireland
(HC 1199)
Department for Social Development: Resource Account 2004-05

The Committee has requested that I ask you to provide written evidence in relation to the two reports detailed above.

The Committee has a number of questions in relation to the Northern Ireland Child Support Agency Client Funds Account 2003-04 as follows:

1. The Child Support Agency Client Funds Account for 2003-04 shows that the Agency recovered £12.7 million receipts from non-resident parents and the Child Support Agency Administration Account for 2003-04 indicates administration costs of £14.3 million. Therefore it costs the Agency £1.13 to collect £1 from a non-resident parent. The Committee would like to know whether the Agency plans to move to a position where it at least recovers a sum equivalent to its costs of administration?

2. Paragraph 8 refers to the conversion of the old scheme assessments to new scheme noting that at the date of the report the bulk of the Agency’s caseload was still under old scheme rules. Please detail the current position on the conversion of old scheme cases to the new scheme providing the percentage of the total caseload now on the new scheme.

3. What steps has the Agency taken to improve its accuracy in the calculation of maintenance assessments?

4. Paragraphs 2.14 and 2.15 indicate that some of the errors detected were made in earlier years but continued to impact upon the balances due from non-resident parents or on current maintenance assessments. Please detail the steps the Agency is taking to eradicate these historic errors so as to ensure the information held is accurate and complete.

5. Please provide details of the balances due from non-resident parents from 2003-04 to date for each category of assessment and the steps the Agency is taking to recover these balances.

6. Paragraph 3.5 notes that Electronic Data Systems Ltd., who developed the new computer system, were releasing a series of enhancements to make the system robust and enable the transfer of old cases to the new system. Please provide an update on the progress made to make the new system robust and also provide details of the transfer of the old cases to the new system (please include caseload data as evidence).

The Committee has a number of questions in relation to the Department for Social Development: Resource Account 2004-05 as follows:

Qualified Audit Opinion Arising from Weaknesses in Financial Control and Monitoring of Expenditure in Relation to Urban Development and Community Development Grants to Voluntary and Community Bodies

1. The report noted that this area of Departmental expenditure on grants to the voluntary and community sector has been the subject to an audit qualification by the Comptroller and Auditor General since the Department was formed in 1999. Please indicate when this area of expenditure will meet the normal levels of accountability expected when distributing public monies?

2. Please detail the annual assurance rating awarded by the Department’s Internal Audit Unit for the Urban Regeneration and Community Development Group since 2004-05.

3. Paragraph 4.10 notes that many of the weaknesses found when projects were selected for testing occurred when staff did not adhere to the Department’s own procedures. Please provide details of any actions the Department has taken to improve this situation and evidence of the impact such steps have had.

4. Please detail how the impact of initiatives such as the development of the Quality Assurance and Improvement Unit are monitored by the Department to ensure value for money is achieved.

5. Paragraph 4.18 notes that the introduction of a Payment Accuracy target for the group was imminent. Please provide details of the outcome against these targets since 2004-05.

6. Please detail how the Department ensures that the approach and quality of output is consistent across all offices within the Urban Regeneration and Community Development Group.

7. Please provide details of the implementation of the risk based approach (paragraphs 4.29 – 4.31) to the verification and monitoring of grants including details of the number of projects (and percentage of total projects) now monitored under the risk based process.

8. Please provide details of the current risk profile of projects awarded grants where these have been risk assessed.

9. Please provide an update of the use made of the funding database and how the benefits described in paragraph 4.32 have been realised.

I would be grateful if we could have your response by Friday, 5 October 2007.

Yours sincerely

John O'Dowd

John O’Dowd
Chairperson

Correspondence of 5 October 2007 from Mr Alan Shannon

Lighthouse Building
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast
BT7 2JB

Telephone: 028 90 829002
Facsimile: 028 90 829560
E-mail: perm.sec@dsdni.gov.uk

Mr John O’Dowd
Chairperson
Public Accounts Committee
Room 371, Parliament Buildings
Stormont
Belfast
BT4 3XX

5th October 2007

Dear John

NIAO Report - Financial Auditing and Reporting: 2003 – 2004
General Report by the Comptroller and Auditor General for Northern Ireland
(HC 96)
Northern Ireland Child Support Agency Client Funds Account 2003-04
NIAO Report - Financial Auditing and Reporting: 2004 – 2005
General Report by the Comptroller and Auditor General for Northern Ireland
(HC 1199)
Department for Social Development: Resource Account 2004-05

The Committee has requested that I provide written evidence in relation to the two reports detailed above.

The Committee had a number of questions in relation to the Northern Ireland Child Support Agency Client Funds Account 2003-04 as follows:

1. The Child Support Agency Client Funds Account for 2003-04 shows that the Agency recovered £12.7 million receipts from non-resident parents and the Child Support Agency Administration Account for 2003-04 indicates administration costs of £14.3 million. Therefore it costs the Agency £1.13 to collect £1 from a non-resident parent. The Committee would like to know whether the Agency plans to move to a position where it at least recovers a sum equivalent to its costs of administration?

Response:

In 2003/04 the total figure for both maintenance collected and arranged by the Northern Ireland Child Support Agency was £17.65m. The Annual Accounts for 2003/04 show only maintenance collected. In maintenance arranged cases, the Northern Ireland Child Support Agency administers the case, but the Non Resident Parent pays the maintenance due direct to the Parent With Care. As these monies do not go through the Northern Ireland Child Support Agency bank account, they are not included in the Agency’s Accounts. The total maintenance arranged by the Northern Ireland Child Support Agency in 2003/04 was £4.95m.

In 2003/04 the administration cost of the Northern Ireland Child Support Agency was £15.023m (not £14.3m as quoted in Mr. O’Dowd’s letter).

In 2003/04 including maintenance arranged, it cost the Agency £0.85 to collect £1 of maintenance.

2. Paragraph 8 refers to the conversion of the old scheme assessments to new scheme noting that at the date of the report the bulk of the Agency’s caseload was still under old scheme rules. Please detail the current position on the conversion of old scheme cases to the new scheme providing the percentage of the total caseload now on the new scheme.

Response:

In line with the Child Support Agency in Great Britain, the Northern Ireland Child Support Agency has been processing new applications using the new computer system and the new legislation since March 2003. The introduction of the new computer system CS2 has not been without its problems. A substantial amount of work has been undertaken to resolve defects in CS2 since it went live in 2003. Although these have improved the system to some extent, workarounds are still required and a large number of cases are still experiencing technical problems.

Great Britain Ministers gave a commitment that old scheme cases would transfer to the new scheme, when the new scheme and the new IT system were working well. The transfer has not taken place because of the well documented difficulties with the IT system.

A White Paper setting out the way forward for the Child Support Agency was published on 13 December 2006. In Great Britain, a Non-Departmental Public Body called the Child Maintenance and Enforcement Commission will replace the current Great Britain Child Support Agency. The structure of the new organisation in Northern Ireland is currently being considered and the policy needs of the new organisation will be a matter for the Assembly. Until then, parents will continue to receive support under their existing scheme rules.

At 31 March 2007 the Agency’s active caseload was 41,861 of which 52% related to the New Scheme and 48% related to the Old Scheme.

At 31 March 2007 the active caseload in Great Britain was 1,187,675 of which 46% related to the New Scheme and 54% related to the Old Scheme.

3. What steps has the Agency taken to improve its accuracy in the calculation of maintenance assessments?

Response:

The Northern Ireland Child Support Agency has had a Ministerial target for Cash Value Accuracy of initial Child Support Maintenance assessments and changes of circumstances for each year during the period 2004/05 to 2006/07. Performance against targets is calculated on a statistically valid sample with the assessment of accuracy based on the last action taken.

Cash Value accuracy reported for the period 2004/05 to 2006/07 was as follows:

Year Cash Value Accuracy Achieved

2004-05 92%
2005-06 97%
2006-07 98%

Comparative results for the Great Britain Agency are as follows:

Year

2004/05 75%
2005/06 81%
2006/07 Not available

While improvements in terms of accuracy have been made in the last number of years the Agency continues to encounter complex issues in calculating Child Maintenance Assessments which reflect the ever changing financial circumstances of parents.

The introduction of trained and supported Complex Case workers who will deal specifically with difficult cases will lead to further performance improvements in this area. In addition, the Agency as part of its Operational Improvement Project will segment its available work into distinct Client groups which will allow staff to specialise and gain experience in specific areas. Again this will provide the opportunity to make further improvement in accuracy levels.

4. Paragraphs 2.14 and 2.15 indicate that some of the errors detected were made in earlier years but continued to impact upon the balances due from non-resident parents or on current maintenance assessments. Please detail the steps the Agency is taking to eradicate these historic errors so as to ensure the information held is accurate and complete.

Response:

The Comptroller and Auditor General qualified his audit opinion on the Northern Ireland Child Support Agency’s Client Funds Account for 2003/04 as a result of errors in the underlying maintenance assessments and incorrect adjustments to customers’ accounts. All errors identified as a result of audit work are corrected however the anticipated cost of reviewing all maintenance assessments is estimated at over £3.2m which at this time would not represent good value and use of Agency staff resources. Such an exercise would divert staff resources from current operations and the Agency’s decision not to review all maintenance assessments at this stage..

The Agency continues to identify and correct historic errors on cases on a daily basis, as part of normal case progression. . Historic errors can be identified through Customer interaction with the Agency, when enforcement action for non payment is commenced and before cases are referred to Debt Collection Agencies.

The Agency’s focus will continue to be on improving accuracy going forward. Monitoring of accuracy covers;

Regular reports are produced by the Northern Ireland Child Support Agency Case Monitoring Team and are examined by a Standards Committee chaired by an independent chairperson. The Standards Committee reports annually to the Northern Ireland Child Support Agency’s Chief Executive. The Annual Report on Decision Making in the Northern Ireland Child Support Agency is published and available on the Agency’s Internet site.

5. Please provide details of the balances due from non-resident parents from 2003-04 to date for each category of assessment and the steps the Agency is taking to recover these balances.

Response:

As at 31st March 2007 balances due from Non Resident Parents were as follows:

Maintenance calculations (New Scheme) £6.786m
Full Maintenance Assessments (Old Scheme) £16.699m
Default Maintenance Decisions (New Scheme) £0.298m
Interim Maintenance Assessments (Old Scheme) £6.085m
Total balance due as at 31/03/07 £29.868m

The recovery of debt from Non Resident Parents is an integral part of the Agency’s Operational Improvement Project. One of the improvements introduced has been the use of credit/debit cards to make “one off” payments against arrears owed. The Agency has also introduced improvements to internal enforcement activities and introduced case lists to identify and target particular categories of debt in order to improve debt recovery. Changes in legislation have also enabled the Agency to contract out work to Debt Collection Agencies.

6. Paragraph 3.5 notes that Electronic Data Systems Ltd., who developed the new computer system, were releasing a series of enhancements to make the system robust and enable the transfer of old cases to the new system. Please provide an update on the progress made to make the new system robust and also provide details of the transfer of the old cases to the new system (please include caseload data as evidence).

Response:

Enhancements to the new computer system (CS2) have been made since 2003/04 and continue to be implemented as part of the Agency’s Operational Improvement Project. Enhancements have focused on reducing the number of cases becoming ‘stuck’ in the Computer System and freeing up cases already ‘stuck’. As stated in paragraph 2, Great Britain Ministers gave a commitment that old scheme cases would transfer to the new scheme, when the new scheme and the new IT system were working well. The transfer has not taken place because further enhancements would be required to achieve this. Work is currently focused on a productivity release to be implemented as part of the planned operational improvements and is aimed at fixing known defects, providing improved system functionality and a robust platform for sustained long-term business development.

The Committee had a number of questions in relation to the Department for Social Development: Resource Account 2004-05 as follows:

Qualified Audit Opinion Arising from Weaknesses in Financial Control and Monitoring of Expenditure in Relation to Urban Development and Community Development Grants to Voluntary and Community Bodies

1. The report noted that this area of Departmental expenditure on grants to the voluntary and community sector has been the subject to an audit qualification by the Comptroller and Auditor General since the Department was formed in 1999. Please indicate when this area of expenditure will meet the normal levels of accountability expected when distributing public monies?

Response:

Considerable progress has been made by the Department in ensuring greater compliance by staff and applicants, as appropriate, with Departmental procedures for the assessment and appraisal of grant applications and in making payments to the voluntary and community sector. In 2006-07, audit assurance ratings showed a significant increase to “substantial assurance” in all but one programme within one Business Area within the Urban Regeneration and Community Development Group (URCDG) of the Department. The Department is focussing its efforts through the provision of advice and guidance, training to staff and management controls to ensure that compliance with procedures across all areas reaches and is maintained at an acceptable level. It is hoped that a substantial audit assurance rating, which essentially means that an acceptable level of accountability has been attained, can be provided to the Group overall during 2007-08.

2. Please detail the annual assurance rating awarded by the Department’s Internal Audit Unit for the Urban Regeneration and Community Development Group since 2004-05.

Response:

In reaching his annual overall assurance rating, the Department’s Head of Internal Audit acknowledged the continued improvement within the Group but considered that ‘as the results of the audits of the Quality Assurance and Improvement Unit, North West Development Office and the Belfast Regeneration Office are at an early stage, and these will undoubtedly have a significant bearing on the assurance rating, I am not currently in a position to reassess the rating from that of last year – i.e. limited assurance.‘

Subsequently his audits in each of those areas resulted in him providing substantial assurance in each case.

In reaching his annual overall assurance rating, the Department’s Head of Internal Audit noted that a substantial assurance was appropriate for the quality systems of-

the Regional Development Office (RDO),
the North West Development Office (NWDO); and
the Belfast Regeneration Office (BRO).

He also stressed that ‘the extent and nature of the improvements in performance identified in this report would normally have resulted in a substantial assurance rating. Whilst the ongoing improvements across the Group are very encouraging the impacts of the failings within Building Sustainable Prosperity Measure 3.3 [Voluntary and Community Unit] is so significant that I can only consider an overall assurance rating of limited assurance.’

3. Paragraph 4.10 notes that many of the weaknesses found when projects were selected for testing occurred when staff did not adhere to the Department’s own procedures. Please provide details of any actions the Department has taken to improve this situation and evidence of the impact such steps have had.

Response:

The Department was encouraged that paragraph 4.10 of the 2004-05 report acknowledged that a decreasing number of weaknesses in the testing of projects by NIAO from that in previous years had been noted. To improve this situation further the various actions taken by the Department have included:

The introduction and enhancement of these initiatives has resulted in improved decision making and payment accuracy levels in a significant number of Business Areas within the Urban Regeneration and Community Development Group. This in turn has led to an increase to a “substantial” audit assurance rating given by the Department’s Internal Audit Unit to all but one Business Area in 2006-07. Work is now being focussed on the remaining Business Area with a view to increasing the overall Group’s assurance rating to “substantial” in 2007-08. With this in mind, the Department has been further encouraged to note that the 2006-07 NIAO report (paragraph 3.4) confirms that no significant issues were noted from NIAO’s examination of a sample of projects funded by the Department during the year and were content that all criteria were satisfied for each of the projects.

4. Please detail how the impact of initiatives such as the development of the Quality Assurance and Improvement Unit are monitored by the Department to ensure value for money is achieved.

Response:

In addition to monthly reports being provided to both the URCDG Management Board and Departmental Management Board on the findings and remedial actions taken on management checks, the results of the Quality Assurance and Improvement Unit’s checking of the quality and adequacy of evidence supporting funding decisions and claims for payment are reported quarterly to both Boards. Comparison is made in the reports against the monthly findings from Business Area management checking and conclusions are drawn on the adequacy and effectiveness of compliance with procedures by staff and recommendations for further improvement made. On occasion QAIU also undertakes focused exercises on areas of work where risk of error is considered to be potentially high. In the same way, line management checking regimes are increased or reduced according to the potential risks. The work of QAIU and completion of Monthly Management Control Reports are also subject to regular separate review by the Department’s Internal Audit Unit. This whole process enables both Departmental and Group Management Boards to monitor progress and ensure value for money is achieved.

During 2006-07, QAIU results indicated that a number of business areas had achieved high levels of accuracy in the processing of grant payments. It is the Department’s view that these results support the decision to centralise QAIU and demonstrate that the unit’s checking against areas of concern and it’s advice and guidance function are being carried out effectively and efficiently to the extent that value for money as a result of its work is clearly being achieved.

As indicated at 2 above, the Department’s Internal Audit Unit acknowledged that for the year ended March 2007 the extent and nature of improvements in performance identified across the Group would normally have resulted in a substantial assurance rating. The overall limited assurance rating given for the Group was based solely on failings identified in one funding programme administered by the Group (BSP Measure 3.3 administered by Voluntary and Community Unit). In the Department’s view this significant progress further demonstrates that greater value for money is being achieved from its funding to the voluntary and community sector.

5. Paragraph 4.18 notes that the introduction of a Payment Accuracy target for the group was imminent. Please provide details of the outcome against these targets since 2004-05.

Response:

The Department evaluated the pilot exercise and concluded that the aim should be to strive to continually improve performance with the ultimate goal of achieving high levels of accuracy in the processing of payments to the voluntary and community sector. Consequently, the setting of a specific target was not progressed, but the levels of payment accuracy were regularly monitored and reported and a focus placed on particular areas of concern. As indicated at 4 above, during 2006-07 a number of business areas consistently achieved high levels of accuracy in the processing of payments as a result of QAIU checking. The Department’s objective now is to ensure that all business areas achieve high levels of accuracy as soon as practical.

6. Please detail how the Department ensures that the approach and quality of output is consistent across all offices within the Urban Regeneration and Community Development Group.

Response:

As indicated, QAIU is responsible for providing consistent advice and support to staff and management across the Group on the application of the procedural guidance. QAIU is also responsible on an ongoing basis for the maintenance and management of the Group’s procedural guidance. Consideration of and agreement on procedural issues by the Procedural Practitioners’ Forum further ensures that the approach and quality of output is consistent across all offices. Importantly, lessons learned from QAIU’s independent checking, procedural compliance issues identified through Business Area management checks and both internal/external audit findings and recommendations are also disseminated to all Business Areas by QAIU. This involves the issue of Advice Bulletins or promulgation through training sessions delivered by QAIU. The Senior Management Teams in each directorate also regularly review the outcomes of test checking, highlighting particular areas of concern and arranging additional checking and training where appropriate. Monthly Management Control reports and Quarterly QAIU reports are also presented and discussed at Group Management Board meetings.

7. Please provide details of the implementation of the risk based approach (paragraphs 4.29 – 4.31) to the verification and monitoring of grants including details of the number of projects (and percentage of total projects) now monitored under the risk based process.

Response:
(A) Details of the implementation of the risk based approach (paragraphs 4.29 – 4.31) to the verification and monitoring of grants

The risk-based approach to grant verification initially piloted in VCU, has now been introduced across all relevant URCDG business areas (VCU, NWDO, RDO and BRO). Risk ratings have been applied to Voluntary and Community Groups funded under the Neighbourhood Renewal Programme and to those receiving funding through similar programmes within VCU. It should be noted that individual groups may be in receipt of grants for more than one project. The assessment involves the risk rating of the group’s internal governance and financial controls rather than those of each and every project. Indications are that the initiative has been positively received by the Voluntary and Community Sector and has shortened turnaround times for payments, provided assurance to groups on the effectiveness of their internal governance arrangements and financial controls, and, where appropriate, helped them raise their governance standards. In his latest report, the Comptroller and Auditor General commented on the substantial progress made in the initiative.

(B) Details of the number of projects (and percentage of total projects) now monitored under the risk based processes at 30 September 2007.

Total Projects

Number rated

351

282
Percentage rated = 80.34%

8. Please provide details of the current risk profile of projects awarded grants where these have been risk assessed.

Response:

Risk Ratings have been awarded to groups in respect of 282 projects. Of these, a low risk rating has been awarded in 185 cases (65.60%); a medium rating awarded in 58 cases (20.56%); and a high rating awarded in 39 cases (13.82%).

9. Please provide an update of the use made of the funding database and how the benefits described in paragraph 4.32 have been realised.

Response:

The Funding Database is operational across all government departments and the Northern Ireland Office and data for over 6000 groups is registered. Formal guidance on input of data relating to applications, awards and payments to the voluntary and community sector is in place and some 550 staff in the NICS have received training. The database and operational procedures have been tested by DSD Internal Audit and substantial assurance given.

In terms of the benefits identified in Section 4.32 of the NIAO Report, the following have been realised:-

Yours sincerely

Alan Shannon

Alan Shannon
Accounting Officer

Chairperson’s letter of 17 December 2007 to Mr Alan Shannon

NIA Logo

Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 17 December 2007

Mr Alan Shannon
Accounting Officer
Department for Social Development
Lighthouse Building
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast
BT7 2JB

Dear Alan

NIAO Report - Financial Auditing and Reporting: 2004 – 2005
General Report by the Comptroller and Auditor General for Northern Ireland
(HC 1199)
Department for Social Development: Resource Account 2004-05

Thank you for your response of 5 October to the Committee’s request for written evidence in relation to DSD: Resource Account 2004-05.

This information will be included in the report which the Committee will publish in due course.

I also acknowledge receipt of the response of 5 October in relation to the Northern Ireland Child Support Agency Client Funds Account 2003-04, which is the subject of an evidence session on 17 January 2008.

Yours sincerely

John O'Dowd

John O’Dowd
Chairperson

Section E

The Private Finance Initiative:
Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

Chairperson’s letter of 10 September 2007 to Mr Paul Sweeney

NIA Logo

Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 10 September 2007

Mr Paul Sweeney
Accounting Officer
Department of Culture, Arts and Leisure
Interpoint
20-24York Street
Belfast
BT15 1AQ

Dear Paul

NIAO Report – The Private Finance Initiative: Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

The Committee wishes to determine how the Department for Culture, Arts and Leisure has assessed the effectiveness and other measures of value for money of the ELFNI system.

The Committee has a number of questions as follows:

1. Paragraph 19 of the Executive Summary records that the value for money of ELFNI “will only be confirmed in the longer term through assessing usage of the system by the public and reviewing its success in meeting the wider needs of government.” What assessments have been made of the usage of the ELFNI system by the public and its success in meeting the wider needs of government?

1. One of the factors in choosing PFI was that many of the risks were transferred to the private sector; PFI also offered innovation, and possible revenue generation sources (paragraph 1.7). What innovation has the private sector brought to the table through the ELFNI project and to what extent has the expected revenue generating sources materialised?

2. Paragraph 4.12 records that, following post-contract signature, the Boards agreed to take back responsibility for disposing of stock and the risks associated with it. In effect, a transfer of risk back to the public sector. How much has the Library Service secured from stock disposal in each financial year since agreeing to take back this responsibility? How does this compare with original estimates? Has the additional training and support provision negotiated been provided and how has the monetary value of this been assessed?

3. A unique aspect of the project was that the Department was not required to fund the project through resource savings. However, it was tasked with improving performance through efficiency savings, such as the release of library personnel from library support and management activities and economies of scale through the reduction in duplication of effort (paragraph 1.15). To what extent have these savings been realised?

4. Paragraph 4.2 refers to change control. What are the procedures for proposing and approving change control requests? How many have there been since contract signature and what is their monetary value?

5. According to paragraph 4.19, the service provider’s projected profit before income tax is 5.85 per cent. What has been the provider’s actual return to date and has this resulted in any profit-sharing with the Library Service?

6. A Contract Executive Team was established to monitor the operation of the contract (paragraph 4.16). How effective has it been and to what extent have penalties had to be imposed by the Team for poor performance (please provide details of deductions made in each financial year since commencement of the service)?

7. How many libraries have closed since the contract became operational and what has been the impact of these closures on the unitary payment?

8. ELFNI provides library staff and the public with access to e-mail and the internet. What procedures are in place to ensure that inappropriate sites cannot be accessed and inappropriate messages sent through the ELFNI system? How have the Boards dealt with breaches or attempted breaches of the rules governing usage?

I would be grateful if we could have your response by Friday, 5 October 2007.

Yours sincerely

John O'Dowd

John O’Dowd
Chairperson

Correspondence of 25 October 2007 from Mr Paul Sweeney

Date: 25 October 2007
Our ref: SECCOR 852 07

Mr John O’Dowd
Chairperson
Northern Ireland Assembly
Public Accounts Committee
Parliament Buildings
Room 371
Stormont
Belfast
BT4 3XX

NIAO Report – The Private Finance Initiative: Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

I refer to your letter of 10 September and my interim reply of 5 October regarding information sought on how the Department has assessed the effectiveness and value for money (VFM) of the ELfNI system. My apologies for not meeting the original deadline but this has been due to efforts by both the Department and the North Eastern Education and Library Board, as lead Board for the ELfNI project, to ensure that we have provided detailed and accurate responses to the points raised by the Committee.

DCAL’s main assessment of the effectiveness and VFM of the ELfNI project will be through the outcome of the Gate 5 review (Operations Review and Benefits Realisation) which is currently underway.

I attach, as an Annex, responses on the various points raised by the Committee. I hope you find this helpful.

Yours sincerely

Paul Sweeney

ANNEX

Electronic Libraries for Northern Ireland

Q1. Paragraph 19 of the Executive Summary records that the value for money of ELFNI “will only be confirmed in the longer term through assessing usage of the system by the public and reviewing its success in meeting the wider needs of government.” What assessments have been made of the usage of the ELFNI system by the public and its success in meeting the wider needs of government?

A benefits management process was developed and implemented by the ELFNI Programme Director. As part of the Office of Government Commerce (OGC) Gateway review process ELFNI will be the first programme or project in Northern Ireland to go through a Gate 5 – Operations Review and Benefits Realisation, which will provide an assessment on the process and this is being carried out from 24 – 26 October 2007.

In terms of usage each Board is provided with regular statistics on the use of the Peoples Network services delivered through ELFNI and other management information includes hits on the NI-Libraries.net portal. Detailed analysis includes insight into the active membership of the 5 library services and their usage of recordable services e.g. active borrower (books only), active computer user (computers only) and active member (user of both borrowing and computer facilities). In terms of on line transactions there is also analysis on the number of library transactions (book renewals, requests etc.) conducted ‘on line’. This information is used by the Education and Library Boards (ELBs) to monitor and tailor services accordingly.

As regards meeting wider government needs, the system provides equal (and free) access to automated library facilities, the internet and e-Government services in all static and mobile libraries across NI. Other additional benefits that have accrued include the use of the customer survey software on public access computers to assist DCAL with the consultation on the future of libraries which prompted nearly 1000 electronic submissions by members of the public.

Q2. One of the factors in choosing PFI was that many of the risks were transferred to the private sector; PFI also offered innovation, and possible revenue generation sources (paragraph 1.7). What innovation has the private sector brought to the table through the ELFNI project and to what extent has the expected revenue generating sources materialised?

The service provider, Amey, has worked with the ELBs to develop an innovative solution to providing the core services. This has included introducing new and improved hardware and software at the time of technology refresh (hardware, software and network upgrade). Another technology refresh is currently being planned for early 2008. Some specific examples of innovative business solutions have been as follows:

PCounter – software that enables public printing to be managed and controlled centrally;

Pharos – a system that allows staff and users to pre-book computer sessions up to a week in advance and for up to 3 sessions in advance. The facility is available in all libraries and means that usage by borrowers is more controlled, fairer, and can be better logged. Sessions for any library computer across the province can be booked in any library or from any internet accessible PC in the world.

Satellite – Amey proposed and implemented a pilot project for the use of satellite technology on two mobile libraries; and

Digital Pen and Paper - Amey introduced the concept of Digital Pen and Paper and funded a pilot in Lisburn Library. This is a facility whereby using special pen and paper digitally captures information in two ways, 1) an image of a form is taken from the hand writing and 2) the data is captured using Optical Character Recognition (OCR) and automatically fills in the form on the screen with the borrower’s information. Although still in pilot, early results are very encouraging both for the libraries and potentially the wider public sector.

In terms of revenue generation, the income from both photocopying and use of internet services was acknowledged in the November 2005 NIAO report (Paragraph 1.7, Reference 12, Page 17) and no further revenue streams have been initiated since then. Portal advertising and catering were both subject to pilot projects but neither has been subject to organisation wide implementation. Proposals for digitising projects aimed at a genealogy market are being considered and may be developed in future.

Q3 Paragraph 4.12 records that, following post-contract signature, the Boards agreed to take back responsibility for disposing of stock and the risks associated with it. In effect, a transfer of risk back to the public sector. How much has the Library Service secured from stock disposal in each financial year since agreeing to take back this responsibility? How does this compare with original estimates? Has the additional training and support provision negotiated been provided and how has the monetary value of this been assessed?

In place of the credit amounts originally included in the contract for stock disposal, the Boards negotiated a reduced credit amount of £10k per annum, additional training and support provision as well as retention of the revenue from stock disposals. The revenue generated by the Boards from stock disposal since taking the service back has been:

2003/2004 £4,078
2004/2005 £35,531
2005/2006 £59,068
2006/2007 £50,305
2007/2008 (to date) £33,013

The original Amey bid guaranteed a monthly amount from the contractor and this was £3,333 in 2002/2003, £4167 in 2003/2004, £5000 in 2004/2005 and £5833 per month thereafter until Contract expiry.

The training element has been delivered in two ways i.e. through the provision of on line tutorials and through formal training courses including an induction training course for new staff and specific courses on MS Outlook, Scanning and other software. This is co-ordinated through an ELFNI training group made up of representatives of the 5 Boards. The levels of support required such as the number of application support calls is assessed each month as part of the service review mechanism. The number of application support calls currently accounts for 20% of the Service providers help desk work i.e. 8643 of the 40858 support calls to date.

There has been no on going assessment of the monetary value of the training and support provision. However, North Eastern Education and Library Board, as lead Board for the ELfNI project, will establish the monetary value of the training and support provided and evaluate whether taking back responsibility for the disposal of stock has proved value for money.

Q4 A unique aspect of the project was that the Department was not required to fund the project through resource savings. However, it was tasked with improving performance through efficiency savings, such as the release of library personnel from library support and management activities and economies of scale through the reduction in duplication of effort (paragraph 1.15). To what extent have these savings been realised?

ELfNI facilitated a streamlining of the stock function enabling staff to be redeployed into frontline posts and also enabling staff to manage their time better through the ability to log on to the network in any library. The reduction in labour intensive (manual) library housekeeping routines has released staff in public service points to engage with the public to promote and exploit the library service stock resources, facilities, equipment and assist the public in the use of ICT through the Peoples Network (New Opportunities Fund ICT Training).

The Department was tasked with improving performance through general efficiency savings in the Boards. Some of these savings were made possible by the ELfNI system. It is difficult to quantify these saving however between year 2005/06 and 2006/07 the total cumulative non-resource releasing efficiency savings in the region of £2m was achieved.

The Gate 5 review will assess the achievement of specific benefits from the ELfNI project as detailed in the original business case.

Q5. Paragraph 4.2 refers to change control. What are the procedures for proposing and approving change control requests? How many have there been since contract signature and what is their monetary value?

The Boards have detailed change control procedures in place. Procedures require changes to be costed and formally approved prior to implementation and all changes have a detailed audit trail to enable tracking and monitoring of progress. The change control process procedures are attached at Appendix A.

Since 2002/03, there have been 765 change control costs at a total cost of £600,453.

Q6 According to paragraph 4.19, the service provider’s projected profit before income tax is 5.85 per cent. What has been the provider’s actual return to date and has this resulted in any profit-sharing with the Library Service?

The contract requires a Profit before Interest and Tax (PBIT) review to be carried out at Year 3 and Year 7 of the contractual term. The first PBIT review of the service provider’s profit was carried out to March 2005 and the overall percentage profit to that date was 11.58% which did not exceed the 14% threshold and therefore no money was required to be paid into an interest bearing joint bank account. The second review will take place in 2009 to correspond with Year 7 of the contract term.

Q7. Contract Executive Team was established to monitor the operation of the contract (paragraph 4.16). How effective has it been and to what extent have penalties had to be imposed by the Team for poor performance (please provide details of deductions made in each financial year since commencement of the service)?

The Intelligent Customer Unit (ICU) manages all aspects of service delivery across the 5 Boards. The arrangement has proved effective in ensuring that all projects were implemented to the original plans and high levels of service have been achieved. As part of the function of the ICU a service review mechanism is in place and the deductions made to the unitary charge in each financial year to date are:

2003/2004 £10,652.56
2004/2005 £32,593.19
2005/2006 £16,409.70
2006/2007 £23,621.99
2007/2008 (to date) £55,619.87

Note: The above figures are adjustments to the unitary charge before taking into account the effect of the Retail Price Index.

Q8 How many libraries have closed since the contract became operational and what has been the impact of these closures on the unitary payment?

A total of 14 libraries have closed since the contract became operational.

The result of these closures in terms of the ELFNI services has been minimal because all services delivered from the libraries that were closed (all Public Access terminals and staff PC’s etc.) were relocated in other libraries within the Education and Library Board in question. In terms of impact on the unitary charge payment, the only factor was in respect of removing the cost of those network connections (BT Broadband) that were not relocated. There was no initial reduction in unitary charge as there were termination costs of £15k for the lines. This was met through continuing to pay the existing unitary charge payment. The net saving following termination costs is a total reduction to the unitary charge of approximately £80,000.

Q9 ELFNI provides library staff and the public with access to e-mail and the internet. What procedures are in place to ensure that inappropriate sites cannot be accessed and inappropriate messages sent through the ELFNI system? How have the Boards dealt with breaches or attempted breaches of the rules governing usage?

An Acceptable Use Policy and associated procedures have been established across the 5 Education and Library Boards. The comprehensive set of procedures is in place to cover all aspects of acceptable use for adults and children and extends to the management of suspected illegal acts and for day to day management on the blocking or unblocking of specific Internet sites. A set of the procedures and guidance is attached at Appendix B.

All staff are subject to the agreed 5 Board policy on the use of email and Internet and in terms of overall management a 5 Board IT Security Group has been established as a function of an Operational Management Group. Sanctions imposed have included the suspension of a member of library staff.

In terms of any breaches by the public, based on the procedures attached at Annex B, users have been warned or barred from the use of services. In terms of illegal acts, hardware has been provided to the PSNI for forensic examination on a number of occasions. This has been following a report by Library staff who have suspected illegal activity and has also been on occasions initiated through a request by PSNI.

Appendix A

Procedure for Administering Costed Change Requests

1.1 Change Request Register

1.1.1 A Change Request Register (CRR) is maintained on the I/: drive by the Administration Manager (AM) and this records the following:

a) Change Request Number (CRN)

b) Change Request Title

c) Date received from Senior Project Manager(SPM)/Contract Manager(CM)

d) Name of Board

e) Brief Synopsis of Request

f) Whether it is Costed or Un-costed

g) Date sent to Amey for Costing (cc Board Contact & Paul Gallagher)

h) Date due to be returned by AMEY

i) Date returned from AMEY

j) Date sent to Service Manager(SM)/SPM/CM for more information

k) Date returned from SM/SPM/CM

l) Date issued to CM/SPM for costing/timescale approval

m) Date returned from the CM/SPM

n) Date issued to Board Rep/CM for approval.

o) Date returned from Board Rep/CM

p) Date approved form sent to AMEY for action (cc Elizabeth Davidson for NEELB CRs)

q) Action Timescale

r) Date sent to SM for sign off

s) Date work signed off by SM as complete

t) Date Amey (and Elizabeth Davidson for NEELB) notified of sign off

u) Status

v) Cost

w) Monthly Charge

x) Comments

y) Date paid by ICU

1.1.2 Access to the register to change or amend data is restricted to the AM and the FM.

1.1.3 Access to this folder should be gained by:

I Drive;

ICU folder;

Change Requests;

Change Request Register;

Select the change request register for the appropriate year.

1.2 Raising a Change Request

1.2.1 If a member of Board Staff wants to initiate a CR they should contact their local SM.

1.2.2 CRs may also be raised by the ICU on behalf of the 5 Boards.

1.2.3 The SM will raise a Change Request using the standard CR Form (see Appendix).

1.2.4 The following details should be completed:

(a) Change request title;

(b) Date issued;

(c) Name of person requesting the CR;

(d) Board;

(e) Department requesting the CR;

(f) Details of the Change Request.

1.2.5 The CR should be electronically signed and dated by the SM and emailed to the SPM.

1.2.6 The SPM will review the form for completeness and the appropriateness of the request. The SPM should indicate whether the CR should be classified as “Costed” or “Uncosted”. (For uncosted change requests – see ‘Procedure 2 for administering Uncosted Change Requests).

1.2.7 If the SPM has any queries regarding the CR, this should be directed to the SM who raised the document.

1.2.8 The SPM should electronically sign and date the CR when he is satisfied that it should be processed.

1.2.9 The CR should be emailed to the AM for processing.

1.3 Processing of a Change Request

1.3.1 When the AM receives the CR, the following details of the CR are recorded onto the CRR:

1.3.2 Change request title;
Date the form was received from the SPM/CM;
The name of the Board requesting the CR;
Description of work/equipment requested;
Whether the CR is costed or uncosted;
The date it was forwarded to Amey for costing;
The date that the costings are due to be returned from Amey.

1.3.3 A unique CR number is recorded onto the CRR and onto the CR. This number will be prefixed by the year issued e.g. 06_001 and is the next in the sequence of numbers in the register.

1.3.4 The line on the CRR register should be coloured yellow to indicate that the CR has been sent to Amey for costing.

1.3.5 The AM should save the copy of the CR on the I drive, accessing it by:
I drive;
ICU folder;
Change Requests;
Change Request forms;
Board;
Open

1.3.6 The document should be saved in this folder.

1.3.7 When a change request is raised, any correspondence should be held in the “open” file.

1.3.8 The form should be emailed to Amey for costing and a copy sent to the member of Board staff who initiated the request.

1.3.9 Amey should cost the CR within 2 weeks unless otherwise agreed.

1.3.10 The AM should review the file to ensure that responses are time managed.

1.3.11 If Amey require more information regarding the CR, the SM should be contacted by email and the AM copied in on the email. The AM should record the date in the CRR.

1.4 Costing of a Change Request

1.4.1 Where possible, the costs provided by Amey should be on a fixed cost basis. This should be stipulated on the CR by Amey.

1.4.2 Once this cost is agreed, there should be no variation in the price charged at the completion of the work.

1.4.3 A project plan should be prepared for larger change requests, such as the refurbishment of a Library. This should be submitted to Amey within a good space of time prior to the commencement of the work to allow for the full costing of the work on a fixed cost basis.

1.5 Approval of Costs on a Change Request

1.5.1 When the CR form is returned after costing by Amey, the AM should record the date received in the CRR. The CR form containing the costs should be saved in the appropriate open folder on the I drive.

1.5.2 The CR form should be emailed to the SPM/CM for approval of the costing and timescales.

1.5.3 The date the form was forwarded should be recorded in the CRR.

1.5.4 The SPM/CM should review the costs provided by Amey to ensure that:

(i) they are not already covered by the Contract;

(ii) the number of hours to be charged are reasonable;

(iii) the hourly rates charged and the mark-up are in line with costs already agreed with Amey;

(iv) the cost of equipment agrees to prices previously agreed with Amey;

(v) costs represent value for money.

1.5.5 Once the SPM/CM has carried out the above checks, the CR should be signed as approved and emailed back to the AM.

1.5.6 The date the CR form was returned should be entered in the CRR by the AM.

1.5.7 The AM should save the signed document on the I Drive.

1.5.8 The CR form is then dealt with in the following manner by the AM:

BELB - the AM should email the CR form to the SM who should print the CR and have the form signed by Assistant Chief Librarian (ACL). The form should be held on file by the SM pending completion of the CR. The SM should email the AM to notify that work can be commenced.

NEELB – the AM should print the CR form and place it in the ACL’s post basket for signature. The signed form should be returned to the AM who should hold it on file pending completion of the work.

SEELB – the AM should email the CR form to the Personal Assistant (PA) of the ACL who should print the form and obtain the signature of the ACL. The PA should notify the AM by email that the form has been signed. The form should be forwarded to the SM to await completion.

SELB – The AM should email the CR to the Chief Librarian (CL). The CL should print the CR off, sign it and forward it to the SM to await completion. The CL should email the AM to confirm approval.

WELB – the AM should email the CR form to the SM who should print the CR and have the form signed the Assistant Chief Librarian (ACL). The form should be held on file by the SM pending completion. The SM should email the AM to notify that work can be commenced.

5 Board/ICU – the AM should print the CR and obtain the approving signature of the CM. The signed form should be held on the open file pending completion of the work.

1.5.9 The date the form was sent should be recorded in the CRR.

1.5.10 The date that the form is returned or notification that it has been signed is received should be recorded in the CRR.

1.5.11 The AM should enter the ACL/CM name on the CR held electronically, to indicate that the costs have been approved. The copy should be saved on the I Drive.

1.6 Notification to action a Change Request

1.6.1 The approved CR which is to be actioned should be emailed to Amey by the AM.

1.6.2 The AM should copy in the Administrative Manager in NEELB Library Headquarters into the email to Amey.

1.6.3 The proposed timescale for action should be recorded in the CRR together with the date the CR was forwarded to Amey for action.

1.6.4 The entry in the CRR should be highlighted in Green to indicate that it has been sent to Amey for action.

1.6.5 The Amey rep should notify the SM of any variations to the price during the period when the work is being undertaken. Any emails received by the SM should be retained with the CR and returned with the signed form on completion of work to the AM.

1.6.6 SMs should ensure that any variations in the cost of a change request should be approved by the ACL before Amey is given approval to commence the work.

1.7 Cancelled Change Requests

1.7.1 Change requests may be cancelled by either the ICU or Amey. If they are cancelled by the ICU on behalf of a Board, Amey should be notified by email.

1.7.2 The CR should be printed off and marked “cancelled”.

1.7.3 The CR should be filed in the cancelled file and an electronic copy held on the I drive in the cancelled folder.

1.7.4 It should be recorded on the CRR that the CR has been cancelled and the line on the spreadsheet changed to brown.

1.8 Change Requests Placed on Hold

1.8.1 If a change request is placed on hold by either the ICU or Amey, a note should be placed on the CR in the open file.

1.8.2 The copy of the CR held electronically should be moved to the folder “on Hold”.

1.8.3 A note should be placed on the CRR that the CR has been put on hold and the line in the spreadsheet should be colour –coded Blue.

1.9 Completion of a Change Request

1.9.1 The AM will be informed by Amey when the CR is complete.

1.9.2 The AM should notify the appropriate SM by email that the Amey rep has stated that the CR is complete.

1.9.3 The date that the SM is notified is entered into the CRR and the spreadsheet line is coloured red.

1.10 Checks carried out by the Service Manager

1.10.1 The SM should check that a site visit form has been completed (where appropriate) by the relevant department.

1.10.2 The SM should check with the relevant department, where work has been carried out or where equipment has been installed, to ensure that the CR has been fully completed.

1.10.3 The costs on the CR form should be checked against the site visit form to ensure that the number of hours charged by Amey agrees to that recorded on the form.

1.10.4 Where there are no queries, the SM will confirm that the work is complete by signing the CR form.

1.10.5 If there are any queries with either the costings or the work involved then the SM will query this with the CR Rep in Amey. The CR must not be signed off until he/she is satisfied with the costs charged, work done and engineers time.

1.10.6 If the SM’s query cannot be resolved with the CR rep in Amey, the SM should refer the query to the SPM.

1.10.7 Any amendments to the costs, which have been agreed with the CR REP in Amey, should be attached to/included on the CR form by the SM. This should include copies of any relevant emails.

1.10.8 The CR should then be signed off by the SM.

1.10.9 The SM should forward the hard copy CR to the AM together with any relevant emails.

1.11 Administration of completed Change Requests

1.11.1 The date the form is returned by the SM should be recorded in the CRR by the AM. The status recorded on the register should be changed to closed and the total cost of the CR should be recorded. The line on the spreadsheet should be coloured lilac.

1.11.2 The CR form should be marked as closed and the form will be filed in the Closed CR File.

1.11.3 If the costed change request has been completed free of charge, the CR should be printed off, marked “complete and uncosted” and filed in separate file.

1.11.4 A copy of the CR form should be held on the I drive in a closed folder for the respective Board.

1.11.5 Amey should be notified by the AM that the CR has been signed off as complete.

1.11.6 Any amended costs should be highlighted to ensure that the correct amount is included in the Amey billing spreadsheet.

1.11.7 The Administration Manager in Library Headquarters NEELB should be notified by email of a NEELB CR has been completed.

Payment of Change Requests

A spreadsheet should be prepared by Amey and forwarded to the ICU detailing CRs due to be paid.

Appendix B

Library Computers Acceptable Use Guidelines Staff Guidance

The Library Computers Acceptable Use Guidelines contain details of what users are allowed or not allowed to do and guidelines for use of library computers. They are only guidelines as to what to do where there are breaches of our Acceptable Use Guidelines. Staff may use their discretion, i.e. in the case of a serious breach of the Guidelines it is possible to skip the warning stages and go straight to a suspension letter for either child or adult. Consult with your Group Librarian/Head of Department in these circumstances.

Children

All children should be given a copy of the leaflets

Children under eight years of age are not allowed to use the Internet unless they are accompanied by a parent or guardian who remains with them while they are on the Internet.

Children under 16 years of age must have the consent of their parent or guardian before being permitted to use the Internet.

Parental consent should be noted in the residence field of the Galaxy borrower record.

From the circulation menu select <borrower add/modify /delete>

Tab to Resident (R’dnt) and F11.

If parental consent is given
If parental consent is not given

Press <enter>.

Once this field is completed the information will transfer overnight to the Pharos system and make the child an active or inactive Internet user.

All Internet access for children is filtered but no filtering is totally foolproof therefore staff must monitor children where possible when they are using the computers.

All library members may book a computer for a maximum of 60 minutes at any one time. If there are computers that are not currently being used and are not reserved then further sessions may be booked by the user. If someone requests access to a terminal but there are none available for some time, and another user has renewed their use of a computer for an extra session or longer, it is acceptable to approach them, explain the situation and request that they finish their session in an agreed time. In most cases people will realise that other users should also have access to the computers. It is not good customer care to terminate another user’s session remotely from the Pharos command centre.

It is important that you challenge as quickly as possible any user who you suspect is not complying with the guidelines.

If a child fails to comply with the Library Computers: Acceptable Use Guidelines for Children the following steps should be taken:

1. Interrupt the session.

2. If they do not comply –

AUP breach dd/mm/yyyy. XXXXXXX library.

Verbal warning given

3. If there is persistent or serious misuse by children the Branch Library Manager/Supervisory Officer may decide to inform the parents by sending

They will also:

AUP breach dd/mm/yyyy. XXXXXXX library.

Letter C1 sent dd/mm/yy.

4. Part of letter C1 is an acknowledgement of receipt by the parent or guardian. When this acknowledgement is returned to the library it should be filed with the relevant parental consent postcard. These remarks, unless further action has had to be taken, should be removed after a year.

5. Children who continue to break the Guidelines will be suspended from the use of library computers for a period of one month. The Branch Library Manager/Supervisory Officer in the branch/department will send –

They should also

User suspended dd/mm/yyyy - dd/mm/yyyy.

AUP breach dd/mm/yyyy. XXXXXXX library.

Letter C2 sent dd/mm/yyyy.

These remarks, unless further action has had to be taken, should be removed after the suspension is over from the borrower record, the parental consent field (R’dnt) in Galaxy changed to yes and Galaxy status Pharos Blocked should also be cleared.

6. If unsuitable sites have been accessed please pass the details to the IPAW officer for blocking. If your IPAW officer is not available contact another member of the IPAW group.

7. If equipment has been damaged, the security system breached, the system setting changed, hacking attempted or software downloaded then in addition to following steps 1-4 you should also

8. A dedicated log book should be kept by the supervisory officer detailing the date of the offence, borrower ID, the date suspension expires and the sites the user accessed or other problems.

Please note that the user is suspended only from using library computers. Access to other services remains as normal unless other breaches of the library regulations or byelaws occur.

Flowchart of Guidelines: Children’s Breach of AUP

Breach AUP

Interrupt and explain (verbal warning)
Ask to comply

If they don’t comply ask them to leave the library

Pass details to IPAW

Record in remarks section of the borrower record

Further breach AUP

Letter C1 to parents (warning letter)

Acknowledgement of C1 returned and filed with parental consent form. These remarks, unless further action has had to be taken, should be removed after a year, from the borrower record

Further breach AUP

Interrupt and explain now banned

Ask to leave

Letter C2 to parent/guardian Banning letter

Record in remarks section of borrower record, change Galaxy status to Pharos Blocked and change parental consent field (R’dnt) to no. These remarks, unless further action has had to be taken, should be removed when the suspension is over, from borrower record. The parental consent field should be changed to yes and Galaxy status Pharos Blocked should also be cleared.

All the information re the incident should be recorded in a dedicated log book.
Adults

All adults should be shown a copy of the Library Computers Acceptable Use Guidelines. They must agree to conditions of use.

Adults who are not library members should be asked for proof of identity. Staff should record their name and address, date, session time, terminal used and retain this record in the branch for one year.

All library members may book a computer for a maximum of 60 minutes at any one time. If there are computers that are not currently being used and are not reserved then further sessions may be booked by the user. If someone requests access to a terminal but there are none available for some time, and another user has renewed their use of a computer for an extra session or longer, it is acceptable to approach them, explain the situation and request that they finish their session in an agreed time. In most cases people will realise that other users should also have access to the computers. It is not good customer care to terminate another user’s session remotely from the Pharos command centre.

It is important that you challenge as quickly as possible any user who you suspect is not complying with the guidelines. If an adult fails to comply with the Acceptable Use Guidelines the following steps should be taken:

1. Interrupt the session -

2. If they do not comply –

AUP breach dd/mm/yyyy. XXXXXXX Library.

Verbal warning given

3. If there is persistent or serious misuse the Group Librarian / Head of Department may decide to send

They should inform the Branch Library Manager / Supervisory Officer of action. They will also

AUP breach dd/mm/yyyy. XXXXXXXX library.

Letter A1 sent dd/mm/yyyy.

4. Users who continue to break the guidelines will be suspended from use of the library computers for a period of three months. The Group Librarian/Head of Department will send

They should also

User suspended dd/mm/yyyy - dd/mm/yyyy.

AUP breach dd/mm/yyyy. XXXXX library.

Letter A2 sent dd/mm/yyyy.

These remarks, unless further action has had to be taken, should be removed after the suspension is over from the borrower record, the Galaxy R’dnt field changed to yes and Galaxy status Pharos Blocked should also be cleared.

6. If unsuitable sites have been accessed please pass the details to the IPAW officer for blocking. If your IPAW officer is not available contact another member of the IPAW group.

7. If equipment has been damaged, the security system breached, the system setting changed , hacking attempted or software downloaded then, in addition to following steps 1-4 ,you should also

8. A dedicated log book should be kept by the supervisory officer detailing the date of the offence, borrower ID, the date suspension expires and the sites the user accessed or other problems.

Please note that the user is suspended only from using library computers. Access to other services remains as normal unless other breaches of the library regulations or byelaws occur.

Flowchart of Guidelines: Adult Breach of Acceptable Use Policy (AUP)

Breach AUP

Interrupt and explain (verbal warning)
Ask to comply

If they don’t comply ask them to leave library

Pass details to IPAW

Record in the borrower record. These remarks, unless further action has had to be taken, should be removed after a year, from the borrower record.

Names of users who persist in breaching the AUG will be sent to the Group Librarian/Head of Department.

Group Librarian/Head of Department will send letter A1 + AUG

Group Librarian/Head of Department will inform BLM/Supervisory Officer that letter has been sent Details recorded in the remarks field borrower record

If further breaches of AUG occur interrupt the session and explain that the user is now banned

Group Librarian/Head of Department will send letter A2 + AUG

Group Librarian/Head of department records in remarks section of borrower record, changes Galaxy status to Pharos Blocked and changes Galaxy R’dnt field to no.
These remarks, unless further action has had to be taken, should be removed when the suspension is over, from borrower record. The Galaxy R’dnt field should be changed to yes and Galaxy status Pharos Blocked should also be cleared.

All the information re the incident should be recorded in a dedicated log

Suspected Illegal use

If you suspect that an illegal act may have been committed ask for the assistance of the Senior Officer in charge.

Examples of illegal activity include accessing paedophilic material, sending obscene, racist or defamatory emails. Please be aware that it is illegal for an adult to cause a child to watch a sexual act, which includes causing a child to look at a photograph or pseudo-photograph of a person engaging in sexual activity.

1. Interrupt the session. Explain that the user is not complying with the guidelines.

2. If they do not comply -

AUP breach dd/mm/yyyy. XXXXXX library.

Verbal warning given.

3. If the IPAW member also suspects criminal misuse they will inform the the Chief Librarian within that Board. Any decision concerning Police Service of Northern Ireland (PSNI) involvement will be taken by the Chief Librarian. If the Chief Librarian is not available the Assistant Chief Librarian will take the decision. The decision to involve PSNI will be relayed to the relevant Group Librarian/Head of Department.

4. The Group Librarian/Head of Department will

5. The Group Librarian/Head of Department will

User suspended dd/mm/yyyy - dd/mm/yyyy.

AUP breach dd/mm/yyyy. XXXXXX library.

Letter A3 sent dd/mm/yyyy.

These remarks, unless further action has had to be taken, should be removed after the suspension is over from the borrower record, the Galaxy R’dnt field changed to yes and Galaxy status Pharos Blocked should also be cleared.

6. Please note that the user is suspended only from using library computers. Access to other services remains as normal unless other breaches of the library regulations or byelaws occur.

7. A record should be kept in the Branch/Department’s dedicated log book of all incidents referred to the PSNI. The only information recorded should be date of offence, borrower ID and date the suspension expires. Although the user will be suspended for 3 months it is possible that the PSNI may not be able to settle the issue within this suspension period and until it is resolved by the PSNI the user cannot be permitted to use the computers. The senior officer should check with the Chief Librarian or ACL on progress of the issue prior to the expiry date and if it is still ongoing a further 3 months suspension should be recorded.

8. Apart from staff suspicions, the only verifiable evidence of an illegal act rests in the ‘history’ of usage on a particular PAT. While this ‘history’ is cleared from the system on a daily basis, the actual information is still accessible on the hard disk and it can be retrieved. However, in the event of a trial, the ‘history’ information on the hard disk must be ‘forensically sound’ i.e. it should not have been tampered with by anyone other than the police. Saving the history of a PAT would be interpreted as interference and would mean that the evidence was not forensically sound and therefore inadmissible in court. The only way for this evidence to be admissible in court is if the PSNI themselves retrieve the data.

It is then the responsibility of the PSNI whether or not to retrieve the ‘history’ and AMEY IT Services to provide access to the hard disk.

9. There may be occasions when the library has not called in the PSNI and where, in the course of official investigations the police, or other agencies may ask to see records held in the library. In such circumstances the Data Protection Act requires that proper documentation, such as a warrant, must be shown by police and/or others before these records can be seen or removed from the library. A police badge is not sufficient documentation.

10. If they do not have a valid warrant an appointment should be made to return to the library with the warrant.

11. In some instances police may wish to remove computers from the library. As all PATs are the property of Amey IT Services a member of AMEY IT Services must sanction their removal. A supervisor receiving a request for the removal of computer equipment should contact their service manager who will inform AMEY IT Services and deal with the issue of the PAT.

Staff are required to get PSNI officers to supply and sign a seized asset form before the computer is released. If there is no seized asset form please make a note of the following details:

The asset number of the piece or pieces of equipment, location, date, officer’s name, signature and contact details.

Send these details to Paul Gallagher at Amey as soon as possible since Amey act on this information to replace the seized equipment. Paul Gallagher’s mobile phone number 07887 825785 should be given to the PSNI.

Flowchart of Guidelines Adult Suspected Illegal Act

Illegal act suspected

Interrupt and explain that user is not complying with guidelines
Ask to comply

If they don’t comply ask them to leave library

Pass details to IPAW representative

Branch library manager/supervisory officer should check the computer history. N.B. do not open the files.

Record in remark section of Galaxy borrower record

If IPAW suspect criminal misuse they will inform Group librarian and Chief librarian

If CL involves PSNI then Group Librarian/Head of department will send letter A3 + AUP and inform branch manager.

Group Librarian/Head of department records in remarks section of borrower record, changes Galaxy status to Pharos Blocked and changes Galaxy R’dnt field to no.
These remarks, unless further action has had to be taken, should be removed when the suspension is over, from borrower record. The Galaxy R’dnt field should be changed to yes and Galaxy status Pharos Blocked should also be cleared.

All the information regarding the incident should be recorded in a dedicated log book.
Child Protection

The Library Service is aware of the risks to children and young people using internet facilities:

1. Children being groomed for abuse through internet chatrooms and email.

2. Adults causing a child to watch a sexual act on the internet, which includes causing a child to look at a photograph or pseudo-photograph of a person engaging in sexual activity.

3. The distribution of pornography with indecent images of children being made, distributed, advertised, sold etc. online.

If there is a concern that any incident, involving either adults or children, constitutes a child protection issue staff should follow the draft Child Protection Policy and Procedures and contact either the designated library officer or one of the deputy designated library officers in the individual Board.

Board

Designated librarian

Telephone

BELB

Muriel Todd
Deputy designated librarian
Stephen McFarlane
Clare Curry

028 9050 9120

028 9050 9155

028 9050 9229

NEELB

Michael McFaul
Deputy designated librarian
Helen Poston

028 2566 4103

028 2563 3959

SEELB

Norma Millar
Deputy designated librarian
Pamela Cooper

028 9042 4232

028 4461 2895

SELB

Anne McCart
Deputy designated librarian
Christina Sloan

028 3752 0760

028 3752 0740

WELB

Trisha Ward
Deputy designated librarian
Pauline Armstrong

028 8225 3646

028 8225 3622
Blocking a Site

The introduction of the Pharos system, as the means of accessing library computers (PATs) by borrower number and PIN, enables the computer system to distinguish between adults and children. This means that different levels of filtering can now be applied for adults and children.

Children are defined as people under 16 years of age.

Adults

The filtering of sites accessed by adults has stopped. All sites already blocked by the filtering system Web Marshal and by the Information Publishing and Web Group (IPaW) will remain blocked.

Children

The level of filtering for children has not changed and IPaW will continue to block all sites deemed unsuitable for children. If staff become aware of unsuitable sites for children the following steps should be taken:-

1. Contact your library representative on IPaW and give them the URL or name of the site –

BELB Clare Curry 028 9050 9229
Clare.Curry@ni-libraries.net

NEELB Yvonne Hirst 028 2566 4125
Yvonne.Hirst@ni-libraries.net

SEELB Joan Thompson 028 9048 7414
Joan.Thompson@ni-libraries.net

SELB Anne McCart 028 3752 0760
Anne.McCart @ni-libraries.net

WELB Trisha Ward 028 8225 3646/ 028 7127 2312
Trisha.Ward@ni-libraries.net

2. If your local representative is not available contact any other member of the IPaW Group.

3. On receiving a request to block a site, the receiving officer will record the date and times of the request and will immediately contact one other member of the IPaW group. Together they will take a decision on whether or not to block a site. Should only one member of the IPaW group be available the decision will rest with that member.

4. If a decision to block for children is taken, the Amey Help Desk will be informed of the details of the site to be blocked within one hour of notification in line with Service Level agreements.

5. Should no member of the IPaW group be available the Intelligent Customer Unit (ICU) should be contacted (028 2566 4135) and all information should be given to the ICU. The ICU will follow the blocking procedure as described above.

6. IPaW members and the ICU are available 9.00am – 5.00 pm Monday to Friday. Any requests for blocking arising outside this period should be held until a member of IPaW or the ICU can be contacted.

7. Amey will log an incident recording the date and the time that a) the request was made and b) the site was blocked.

8. Once a decision has been taken on the blocking of a site, the member of the IPaW or ICU staff will contact the location where the original request was raised and notify them of the outcome.

9. There may be some sites that ni-libraries cannot provide access to because they contravene existing legislation and if accessed in a public environment could leave them open to legal proceedings. If staff are concerned that a particular site falls into this category they should follow the blocking procedure. If the IPaW agree to the site being blocked they will notify Amey that the site should be blocked for both children and adults.

Process for unblocking a web site

You must have a good reason to unblock a site and it should not be done without discussion with the user concerned. It is accepted that the filtering system can result in legitimate sites being blocked, and after discussion with the user the rationale for unblocking is usually fairly straightforward. These sites will remain accessible once Amey has unblocked them.

In the case of foreign language sites, staff may have concerns about having them unblocked if they do not understand the content. The Google translation facility covers the main European languages and could be used to get a better understanding of the content of the site. Alternatively staff could get the site unblocked by Amey, and then pass on the web address to any member of IPaW to have it checked more thoroughly.

There are however sites that have been legitimately blocked but in special circumstances may be unblocked for a period of time e.g. research purposes. In such circumstances the person in charge of the branch/department must determine whether the request to unblock is valid. They should elicit the reason for the request and the length of time the site should remain unblocked and decide whether or not the request is valid before asking for any site to be unblocked. If it is decided to unblock you should:

Library and Corporate Services

Library and Corporate Services

Library and Corporate Services

Library and Corporate Services

Library and Corporate Services

Library and Corporate Services

 

Chairperson’s letter of 13 December 2007 to Mr Paul Sweeney

NIA Logo

Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366
Email: cathie.white@niassembly.gov.uk

Date: 13 December 2007

Mr Paul Sweeney
Accounting Officer
Department of Culture, Arts and Leisure
Interpoint
20-24 York Street
Belfast
BT15 1AQ

Dear Paul

Re NIAO report – The Private Finance Initiative: Electronic Libraries for Northern Ireland

Thank you for your written evidence in relation to the NIAO report on The Private Finance Initiative: Electronic Libraries for Northern Ireland.

The Committee at its meeting today has considered your response and has some further questions which are detailed below:

1. Question 1 and Question 4

In your response, you indicated that you were due to carry out a Gate 5 Exercise, from 24-26 October 2007, which will review the operation of the project and assess the benefits realised. Please forward a copy of this important review, on completion, as this will assist the Committee the effectiveness of the ELFNI project.

2. Question 2

Please provide me with details of the income generated to date from both photocopying and internet services and the anticipated income from these activities, as set out in the final business case?

3. Question 3

In your response, you indicated that NEELB is carrying out an exercise to determine the monetary value of the training and support provision. Please forward a copy of this assessment on completion, since it is essential in evaluating whether taking back responsibility for the disposal of stock has proved value for money.

4. Question 8

Having considered your response to this question, there are a number of issues which the Committee wishes to follow up. The closure of 14 libraries was the equivalent of closing over 6% of the total sites serviced by ELFNI. However, the net savings were less than £80,000 as all Public Access terminals and staff PCs etc were relocated in other libraries within the Education and Library Board in question.

I would appreciate a reply by Monday, 14 January 2008.

Yours sincerely

John O’Dowd

Chairperson

Correspondence of 15 January 2008 from Mr Paul Sweeney

DCAL Logo

Date: 15 January 2008
Ref: SECCOR 1084/2007

Mr John O’Dowd
Chairperson
Northern Ireland Assembly
Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX

Dear Mr O’Dowd

NIAO Report – The Private Finance Initiative: Electronic Libraries For Northern Ireland

Further to your correspondence of 13 December 2007, please find attached responses to the additional points raised together with the Gate 5 report as requested.

The Gate 5 report is largely positive and the Department will engage with the Boards, where relevant, to address the recommendations identified.

I hope you find this helpful.

Yours sincerely

Paul Sweeny

Paul Sweeney

Enc

Question 1 and Question 4
In your response, you indicated that you were due to carry out a Gate 5 Exercise, from 24-26 October 2007, which will review the operation of the project and assess the benefits realised. Please forward a copy of this important review, on completion, as this will assist the Committee the effectiveness of the ELFNI project.

1. A copy of the Office of Government Commerce (OGC) Gate 5 Review is attached at Annex 1.

2. The Gate 5 report refers to the hands off approach of the Department. DCAL was closely involved in the project in the development and implementation phases. The Department considers that as the project is now operational and largely successful, the Boards are managing this contract and computer system satisfactorily.

3. The Department monitors the ELfNI project through minutes of meetings and more generally within the established formal meetings with Board representatives. The Department retains the right to observer status on the Project Steering Group (Contract Executive) and would adopt a closer monitoring role in future, if it was felt necessary.

4. The Department has noted the views expressed in relation to ‘brokering arrangements between bodies within the DCAL family … on issues such as genealogy’. The Department considers opportunities for partnerships and joined up approaches where there is a clear need; within the overall priorities and available resources.

5. An action plan to address the Gate 5 report recommendations is being prepared and will be considered at the ELFNI Contract Executive on 23rd January 2008.

Question 2
Please provide me with details of the income generated to date from both photocopying and internet services and the anticipated income from these activities, as set out in the final business case?

1. Under the terms of the ELFNI Contract the service provider takes the business volume risk in respect of photocopying. The predicted photocopying income specified in the full business case based on volumes at that time is set out in the table below as well as the actual income received to date.

2002/03
£

2003/04
£

2004/05
£

2005/06
£

2006/07
£

Estimated Income

72,842

145,684

145,684

145,684

145,684

Actual Income

106,057*

106,174

110,228

116,732

111,606

2. The table below provides a comparison on income from charged Internet Services.

2002/03

2003/04

2004/05

2005/06

2006/07

Estimated Income
(part year)

21,581

129,488

172,650

172,650

172,650

Actual Income
(Full year)

31,190*

32,493

58,424

71,232

70,235

Note: * Some of this income may have accrued from legacy services in place before ELFNI implementation.

The estimated income figures are projections developed for the Business Case for affordability purposes. The actual income is the reported income received by the Boards. However, the contractual arrangement, which was subject to a tender process, is that the Boards pay per copy for public and Board photocopying.

One explanation for actual income being less than estimated is the trend in library users downloading more information than before. For example, photocopying from journals in reference departments by students used to form a large part of the Central Library’s income. This has now diminished as articles can be downloaded from the website and from university websites which provide full text articles.

Question 3
In your response, you indicated that NEELB is carrying out an exercise to determine the monetary value of the training and support provision. Please forward a copy of this assessment on completion, since it is essential in evaluating whether taking back responsibility for the disposal of stock has proved value for money.

The exercise to determine the monetary value of the additional support and training provision is currently being completed and will be presented to the ELFNI Contract Executive (Programme Board) on 23rd January 2008 for consideration and approval. A full copy of the final assessment will be provided immediately it is approved.

Question 8
Having considered your response to this question, there are a number of issues which the Committee wishes to follow up. The closure of 14 libraries was the equivalent of closing over 6% of the total sites serviced by ELFNI. However, the net savings were less than £80,000 as all Public Access Terminals and staff PCs etc were relocated in other libraries within the Education and Library Board in question.

The Boards are responsible for determining how best to deliver public library services. Hence the decision to transfer or terminate services, electronic or otherwise rests with the Boards.

The modernisation and restructuring of library services was concerned with reorganising and improving library services. The main reorganisation occurred around 2005; two to three years after the implementation of ELfNI. The decisions to transfer or terminate services were taken on a case by case basis and following consultation exercises by the relevant Boards on the delivery of the library service, taking into account information on usage levels in the region.

Also, whilst 6% of sites have gone these have tended to be the smallest libraries and this would not therefore equate with 6% of computers- the small libraries closed usually had only 2 public computers each.

Initial demand in most locations was extremely high with queues of members of the public at busy times. Although this demand has since moderated, at busy periods there is still a demand for computers which outstrips supply. This demand was assessed in each board when the possibility of transfer of services was possible.

Since the start of the contract a number of new libraries have been built and buildings refurbished to provide bigger and better designed facilities to accommodate ICT facilities, so it has been possible to house more terminals than was possible in the libraries in place at the start of ELfNI and thus come closer to meeting customer demands. Locations have been changed to provide maximum benefit for the public as space and demand change.

If no transfer of any public or staff computers had taken place the saving in the unitary charge payment in total for the libraries closed would be £1543 per month. The total saving that would have accrued to December 2007 is £42,698.

Additional computers are being well used wherever they have been re-located. For information an analysis of sessions used by library location is attached as Annex B.

Annex A

NI Gateway Review Process

(OGC Gateway Reviews delivered by NICS Centre of Excellence pending
OGC Authorised Hub status)

Review 5: Operations review & benefits realisation

Version number: 1.0

Date of issue to SRO: 26th October 2007

SRO: Gordon Topping

Department: Department of Culture, Arts & Leisure (DCAL)

Lead Agency or NDPB: North Eastern Education & Library Board (NEELB)

NI Gateway Review dates: 24th – 26th October 2007

NI Gateway Review Team Leader: Stephen McDowell (CPD, DFP)

NI Gateway Review Team Members:

Background

The Electronic Libraries for Northern Ireland (ELfNI) project was implanted to enable public libraries in Northern Ireland to update and modernise their services, to make the most of the potential for sharing information and rationalising services across the five Education and Library Boards.

The strategic objectives of the ELfNI project are as follows:

A contract was signed with AMEY plc for the provision of services to meet these objectives in January 2002. This is a PFI contract valued at £36.5m covering a 10 year period from its commencement on 1st May 2002. Rollout across 126 public library sites and the schools library service took 15 months and became fully operational on 1st August 2003.

Position regarding NI Gateway Reviews

The ELfNI project was the first NI public sector project submitted for review under the OGC Gateway process and has undergone the following reviews:

Purposes and conduct of the NI Gateway Review
Purposes of the NI Gateway Review

The primary purposes of an NI Gateway Review 5 are to assess whether the anticipated benefits are being delivered and that the ongoing contractual arrangements meet the business need.

Appendix A gives the full purposes statement for an NI Gateway Review 5.

Conduct of the NI Gateway Review

This NI Gateway Review 5 was carried out from 24th October to 26th October 2007 at NEELB offices in Ballymena and at Lisburn City Library. The team members are listed on the front cover.

The people interviewed are listed in Appendix B.

Appendix D shows a list of documents reviewed.

The Review Team would like to thank both ELfNI stakeholders and AMEY staff for their support and openness during the interviews. This strongly contributed to the Review Team’s understanding of the Project and the outcome of this review.

Conclusion

The Review Team finds that ELfNI has succeeded in delivering a highly effective, modernised NI library service. The contract which underpins this is being managed effectively and good partnership relations exist between the service provider (AMEY plc) and the business.

In order to maximise the potential benefits in the remaining years of the contract the review team has made a number of key recommendations in support of this. The review team has found evidence of good practice at various levels and has commented accordingly in the body of the report.

A summary of recommendations can be found in Appendix C.

Status

Normally a Gate 5 review, like all other Gateway reviews, will make recommendations labelled Red, Amber or Green (RAG). This indicates how quickly action should be taken by the project on key issues. However, the elapsed time since the previous Gate 4a review (5 years) coupled with the fact that the ELfNI project team has long since been stood down suggest that recommendations tagged with a RAG status would be inappropriate. However the review team consider that there are a number of recommendations that need to be made to ensure the continued success of ELfNI.

Important recommendations which require priority action and which should be considered as a matter of urgency will be identified as ‘key’ recommendations.

The review team have been assured that recommendations arising from the previous Gate 4a review have been adequately addressed.

A summary of recommendations, progress and status from the previous NI Gateway Review can be found in Appendix E.

Findings and recommendations
1: Review of operating phase

The review teams finds that at the half-way point in the contract, the ELfNI project is in good health. From the client side, the contract is managed by the Intelligent Customer Unit (ICU) based in NEELB offices, Ballymena. There is good evidence to suggest that the contract, though complex, is being managed well. There is also good evidence of an excellent partnership between ICU and AMEY (the prime contractor). During interviews, it was suggested to the review team that this partnership relationship risked becoming “too cosy” but the team found no evidence to support this view. In fact, the review team found that the nature of the contract and in particular the strict regime of penalties and remedies ensured that a sufficient degree of professional separation remains in place between the client (represented by ICU) and AMEY.

It was clearly evident that ELfNI has delivered a modern and transformed service for libraries in Northern Ireland, structured around three core components:

Perceptions of AMEY as lead service provider are good and service levels have remained high since ‘steady state’ was reached in August 2003. When problems have arisen there is strong evidence that the AMEY helpdesk has provided good front line support. Formal closure of all faults is communicated to the end-users as normal procedure. There have been occasions when financial penalties have been imposed on AMEY for failure to meet agreed service levels. In these few instances, the partnership relations have remained cordial and professional.

However the review team also finds that there is dissatisfaction with the performance of the DS Galaxy LMS system and related software support. There was also strong evidence of the benefits of public access to the computers particularly in support of disadvantaged groups for example migrant workers; a group not considered in the early stages of the project. It also was evident the web portal aspect of the service has not been fully developed. This view was supported by comments made during a conversation with a member of the public who was formally consulted during the review.

The review team therefore recommends that further work is carried out to improve structured access to sources of relevant information eg Government web-sites

The review team examined the governance arrangements in place for management of ELfNI services and the underlying contract. The current structures are an outcome of governance rationalisation which has resulted in simplified arrangements. The review team finds that there is uncertainty in the roles and responsibilities of both the Contract Executive (CE) and the Operational Management Group (OMG) leading to over-reliance on the ICU. The review team also finds that there is a lack of separation between ‘business as usual’ and project activities which may have contributed to a lack of focus in delivering innovation. A number pilot projects have been undertaken but not always delivered as new services across the sector.

We therefore recommend all existing and future groups have clear terms of reference which are clearly communicated and understood by members.
We also recommend that there is a clear separation between contract management and project management responsibilities and this should be reflected in the organisational structure of the ICU and all other existing groups.

The review team found that the sponsoring department (DCAL) has generally adopted a ‘hands-off’ approach towards ELfNI. The department is happy with what has been achieved to date and particularly pleased with positive findings of the NIAO PFI audit on ELfNI. However, the review team felt that while DCAL are certainly supportive ‘from a distance’, they could be more proactive in certain areas eg taking the lead in brokering agreements between bodies within the DCAL family (PRONI, NI libraries and Museums) on issues such as genealogy, where there is good potential for partnership and a more joined-up approach.

2: Business Case and benefits management

The review team finds that the business case has been kept up to date and still provides justification for ongoing investment in ELfNI services. The nature of the PFI contract and the complex structure of the unitary payments model in particular, make it difficult to clearly assess monetary benefits. However, the review team finds that there is a widely held belief across all of the boards that VFM is being delivered and the services being delivered through ELfNI are well worth the cost.

It was clearly stated by a number of staff that monetary benefits or substantial efficiency savings were never intended as the prime justification for the project and the business case reflects this. However the review team finds that there are efficiency savings being demonstrated at local library service level. The view of the review team is that these should be formally identified, measured and reported on. Visibility of these ‘spin-off’ benefits for staff at all levels would provide a clear sense of achievement. Examples include:

The review team recommends that action is taken to formally identify, measure and report on these ‘spin-off’ benefits.
We further recommend that a suitable medium is chosen to communicate these benefits to all library staff which will maximise a sense of achievement and success.

The review team also finds that in relation to the non-monetary benefits identified in the business case, the ELfNI project has an acceptable approach to benefits management. This was especially noteworthy in light of the relative immaturity in benefits management best practice when the project began. There is a visible connection between benefits identified in the business case and those subsequently modelled and reported. New benefits added, for example, as a result of an Equal Impact Assessment undertaken in 2001, have been adopted into the overall strategy.

3: Plans for ongoing improvements in value for money

The review team finds that most of the potential for improvements in VFM relate to the ongoing improvements in service performance based on technical innovation. This is an area in which the supplier demonstrated a high degree of enthusiasm. The details of these potential future projects are considered further in the remaining sections of the report.

4: Plans for ongoing improvements in performance and innovation

The review team is of the view that plans for on-going improvements in performance and innovation need to be considered in the context of the development of an overarching ICT strategy for the NI libraries sector (see section 6).

5: Review of organisational learning and maturity targets

The ELfNI project is an exemplar on a number of fronts:

Reviews of various types have taken place over the course of the project including and End Project Report (March 2002) and an NIAO audit on the PFI aspects of ELfNI. The review team are convinced that these represent key sources of organisational learning. In addition the experience of letting and managing a complex PFI contract and subsequent partnership working with AMEY also provide an excellent source of lessons learned material.

The review team therefore recommends that ELfNI undertake work to pull together lessons learned from these and all other relevant sources into a coherent whole. This lessons learned resource should be formally adopted by the organisations involved. Processes should be established to keep it up to date and circulate to relevant stakeholders including sharing with other organisations.
6: Readiness for the future – Plans for future service provision

During the course of the review it became increasingly clear that a strategic approach to the provision of ICT enabled services across NI libraries was needed. In effect, the ELfNI contract provides the de-facto ICT strategy and this is unacceptable. With plans in place for the establishment of a new NI Library Authority (NILA) in April 2009 it is essential to develop an ICT strategy which incorporates the services currently provided through ELfNI. This will provide much need strategic direction for the innovative projects such as Digitisation and Radio Frequency Identification (RFID). However, this strategy must go much further than this and should incorporate all future provision of ICT technologies and services over the agreed period. The consensus reached across the five boards which was fundamental to the original ELfNI agreement, must now be further exploited to set key strategic priorities and objectives for ICT.

The review team therefore makes a ‘key’ recommendation that work is undertaken to formulate an ICT strategy for NI Libraries in consultation with the CE designate of NILA. This strategy should define a portfolio of ICT enabled service areas for NI Libraries. Ownership of this strategy should sit with a new ICT Steering Group, as a replacement for the CE, with representation from both senior business and ICT professionals.
We make a further ‘key’ recommendation that the ICT Steering Group take ownership of the prioritisation of potential programmes and projects against resources. These programmes should be designed with a strong benefit delivery focus which is in turn based on the integration of key outputs from the projects within the programmes.
The review team makes a final ‘key’ recommendation that formal benefits management arrangements are put in place for all new ICT enabled investments. These arrangements must address both monetary and non-monetary aspects and must fully embrace a current best practice approach to include clear baseline measures and detailed plans for identification, measurement and reporting integrated into business processes.
Appendix A
Purposes of NI Gateway Review 5: Operations review & benefits realisation
Appendix B
Interviewees

Name

Role

Desi Curry

Contract Manager CE/OMG Chair

Jamie Aiken

Senior Project Manager OMG

Michael McFaul

Assistant Chief Librarian NEELB OMG

David Jess

Assistant Chief Librarian BELB OMG

Sam Moore

Amey Regional Manager CE

Anne Connolly

Dir. Library & Corporate Services

David Polley

DCAL Representative

Gordon Topping

ELFNI SRO & NEELB CEO

Adrienne Adair

Assistant Chief Librarian SEELB OMG

Margaret Bell

Librarian

Julie Reid

Librarian

Paul Gallagher

Amey Service Manager

Kathleen Ryan

Chief Librarian SELB CE

Delia Campbell

Amey Contract Manager OMG

Ian Hoey

Member of the public, regular library user
Appendix C
Summary of recommendations

Key – High priority recommendation. This recommendation is very important in terms of organisational learning/maturity dimension or in preparing for the future of NI library services. Take action immediately.

No label – Useful recommendation. This recommendation may prove useful in terms of organisational learning/maturity or in preparation for the future of NI library services. Complete within 6 months.

Ref. No.

Recommendation

Status

1.

The review team recommends that further work is carried out to improve structured access to sources of relevant information eg Government web-sites

2.

We therefore recommend all existing and future groups have clear terms of reference which are clearly communicated and understood by members.

3.

We also recommend that there is a clear separation between contract management and project management responsibilities and this should be reflected in the organisational structure of the ICU and all other existing groups.

4.

The review team recommends that action is taken to formally identify, measure and report on these ‘spin-off’ benefits.

5.

We further recommend that a suitable medium is chosen to communicate these benefits to all library staff which will maximise a sense of achievement and success.

6.

The review team therefore recommends that ELfNI undertake work to pull together lessons learned from these and all other relevant sources into a coherent whole. This lessons learned resource should be formally adopted by the organisations involved. Processes should be established to keep it up to date and circulate to relevant stakeholders including sharing with other organisations.

7.

The review team therefore makes a ‘key’ recommendation that work is undertaken to formulate an ICT strategy for NI Libraries in consultation with the CE designate of NILA. This strategy should define a portfolio of ICT enabled service areas for NI Libraries. Ownership of this strategy should sit with a new ICT Steering Group, as a replacement for the CE, with representation from both senior business and ICT professionals.

Key

8.

We make a further ‘key’ recommendation that the ICT Steering Group take ownership of the prioritisation of potential programmes and projects against resources. These programmes should be designed with a strong benefit delivery focus which is in turn based on the integration of key outputs from the projects within the programmes.

Key

9.

The review team makes a final ‘key’ recommendation that formal benefits management arrangements are put in place for all new ICT enabled investments. These arrangements must address both monetary and non-monetary aspects and must fully embrace a current best practice approach to include clear baseline measures and detailed plans for identification, measurement and reporting integrated into business processes.

Key

NB: Full explanation of ‘key’ recommendations can be found in the status section of the report.

Appendix D
Documents reviewed

The list below indicates the documents consulted over the course of this review.

Appendix E
Recommendations from previous NI Gateway Review (4a)

Recommendation

Progress/Status

The SRO needs to urgently review the governance regime with a view to speeding up decision making, in particular via empowerment of individual Board members in control bodies. A culture of empowerment at appropriate levels of the communication chain should also be promoted. The ICU should be granted appropriate authority to manage the decision making processes.

Review of governance was carried out. Group structure was revised and delegated authority given

When producing the Lessons Learned Report after the NEELB roll-out the BELB report should be re-visited and wider contribution solicited.

BELB implementation was reviewed and plans amended for NEELB. Further implementation plans for the other three Boards then learned from both NEELB and BELB. Implementation in all 5 then completed ahead of time.

ICU and AMEY should jointly take immediate action to manage staff expectations by improving communications to all staff levels. A Joint Communications Plan should be agreed and implemented. A variety of communication mechanisms should be used rather than relying on the printed word.

Communication strategy adopted including ELFNI champions, working groups and ELFNI newsletter. Communication strategy now being reviewed for steady state and lessons learned to date.

Action should be taken to secure DS expertise for the long-term support of the project on an as-required basis, even if this incurs a cost.

Representation made to Amey and the role of Library system administration discussed in detail. Full time DS member of staff now employed locally in the Amey service desk.

ICU and AMEY should consider the establishment of a business support facility to complement the AMEY Help Desk

Help desk expanded to include advice on applications. ICU service managers deployed in each Board to deal with local issues and ICU Intranet about to be introduced

Whilst the main issue for the meeting on 4 February will be the financial viability and future of AMEY, and to receive the necessary assurances, the SRO should also address the other recommendations in this report which directly affect the partnership and delivery.

Formal Amey representation established at all Contract Executive meetings plus regular meetings between Contract Manager and Amey Director. SRO also meets senior Amey personnel twice yearly to discuss partnership issues.

The SRO should accelerate contingency plans as a matter of urgency for the event of buy-out of AMEY (or the contract), or contract default.

Comprehensive contingency plans drawn up and agreed by Contract Executive. Liaison with DCAL and DFP also took place on financial implications of the risks involved

The Project should produce an Acceptable Use Policy for the Web Portal and a Security Policy for the system. Currently, the IPAW hold the responsibility for this. However, the Gateway Review team consider that the Contract Management Executive review the situation relating to ownership and authority, particularly in light of the extreme pressure on the IPAW resources, and the sensitivities associated with these Policy requirements.

Acceptable use policy developed and published and subject to ongoing review. Practical guides also produced.

Action should be taken to review and update the risk register.

Risk is on the agenda of all quarterly Contract Executive meeting and the risk register is updated and signed off at each meeting.

ICU and AMEY should meet quickly to agree a mutually acceptable way forward for the Book Sales function.

Negotations successfully completed and book sales funtion returned to the Boards as required.

Urgent action should be taken to establish consistent business process mapping across all five Boards. Also refer to the recommendations in 5.3 relating to empowerment of individuals to speed up decision making.

A post-implementation review (PIR) should be held after completion of the roll-out of LMS to NEELB, prior to the start of roll-out to the remaining three Boards.

Review carried out by Senior Projects Manager and planning for remaining implementation adjusted accordingly.

Chairperson’s letter of 4 September 2008 to Mr Paul Sweeney

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Public Accounts Committee
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Tel: (028) 9052 1208
Fax: (028) 9052 0366
Email: Jim.Beatty@niassembly.gov.uk

Date: 4 September 2008

Mr Paul Sweeney
Accounting Officer
Department of Culture, Arts and Leisure
Interpoint
20-24 York Street
Belfast
BT15 1AQ

Date:

Dear Paul

NIAO Report – The Private Finance Initiative: Electronic Libraries for Northern Ireland (ELFNI) (HC 523)

Thank you for your response of 15 January 2008 to the Committee’s request for further written evidence in relation to the Private Finance Initiative: Electronic Libraries for Northern Ireland.

This information will be included in the report which the Committee will publish on 25 September 2008.

Yours sincerely

Paul Maskey

Paul Maskey

Chairperson
Public Accounts Committee

Chairperson’s letter of 7 September 2007
to Mr Alan Shannon

Section F

Memorandum of Reply:
Department of Social Development:
Housing the Homeless (CM 6283)

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Date: 07 September 2007

Mr Alan Shannon
Accounting Officer
Department for Social Development
Lighthouse Building
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast
BT7 2JB

Dear Alan

Memorandum of Response: Department of Social Development: Housing the Homeless

The Committee has requested that I write to you for an update on the progress against the Department’s responses to the Committee’s conclusions, including the main conclusions, of the House of Commons Committee of Public Accounts report ‘Department of Social Development: Housing the Homeless’.

I would be grateful if we could have your response by Monday, 08 October 2007.

Yours sincerely

John O'Dowd

John O’Dowd

Chairperson

Correspondence of 8 October 2007 from Mr Alan Shannon

From: The Permanent Secretary

Lighthouse Building
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast
BT7 2JB

Telephone: 028 90 829002
Facsimile: 028 90 829560
E-mail: perm.sec@dsdni.gov.uk

Mr John O’Dowd
Chairman
Public Accounts Committee
Room 371, Parliament Buildings
Stormont
BELFAST
BT4 3XX 8th October 2007

Dear Mr O’Dowd

Memorandum of Response: Department for Social Development: Housing the Homeless

Thank you for your letter of 7 September 2007 requesting an update on progress against the Department’s responses to the conclusions of the House of Commons Public Accounts Committee on the Northern Ireland Audit Office report “Housing the Homeless”.

All of the Committee’s conclusions have been fully addressed, with the exception of the following:

In response to the Committee’s conclusion number 3, the Department established an interdepartmental, cross-sectoral Working Group to consider homelessness in the context of the Promoting Social Inclusion initiative. The Working Group published a report “Promoting Social Inclusion of Homeless People: Addressing the Causes and Effects of Homelessness in Northern Ireland” in November 2004 for consultation. In relation to the prevention of homelessness, the Working Group identified a total of 15 action points for the Department’s Housing Division and a total of 22 action points for the Housing Executive. All of these have either been achieved, are being addressed, or will be considered at the appropriate time.

Based on the outcome of consultation on the Working Group’s report, the Department published the strategy document “Including the Homeless” in July 2007. The Department has established an interdepartmental, cross sectoral Steering Group to oversee and ensure the implementation of the strategy, which includes an Action Plan of appropriate measures to address the causes and effects of homelessness in Northern Ireland.

The Committee’s conclusion No. 6 welcomed the Housing Executive’s statement of intent to stop using Bed and Breakfast establishments as temporary accommodation for homeless people while conclusion No. 7 highlighted the high costs associated with such accommodation and urged the Housing Executive to make strenuous efforts to ensure that the rent it pays for Bed and Breakfast is as close as possible to the Housing Benefit limit. The Housing Executive gave a commitment to end the use of Bed and Breakfast establishments (except in emergencies) by March 2006, which has been achieved.

The Committee’s conclusion No. 13 pointed to high demand for permanent homes in areas of low supply and urged the Department to review its projections for new building requirements. The Department gave a commitment to establish projections for new build based on a revised model, which has been done. On this basis, it is estimated that there is a need for 2,000 new units of social housing per annum. The extent to which this can be achieved is being considered in the context of the Minister’s Affordability Working Group and the current negotiations on the Comprehensive Spending Review.

I hope this reassures the Committee that the Department and the Housing Executive remain fully committed to addressing the causes and effects of homelessness in Northern Ireland.

Yours sincerely

Alan Shannon

Alan Shannon


Chairperson’s letter of 25 October 2007 to Mr Alan Shannon

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Date: 25 October 2007

Alan Shannon
Lighthouse Building
1 Cromac Place
Gasworks Business Park
Ormeau Road
Belfast
BT7 2JB

Dear Alan

Re NIAO Report on ‘Housing the Homeless’

At today’s meeting, the Committee considered your response to the Memorandum of Response on ‘Housing the Homeless’.

The Committee noted the update on progress on the undertakings given by the Department in the Memorandum of Response. However, the Committee have requested that the Northern Ireland Audit Office look at this matter in its future work programme.

Yours Sincerely

John O'Dowd

John O’Dowd

Chairperson

Section F

Memorandum of Reply: Department of Social Development: Housing
the Homeless (CM 6283)

Section G

Memorandum of Reply:
Control of River Pollution in Northern Ireland (NIA 51/00)

Chairperson’s letter of 25 October 2007 to Dr Malcolm McKibbin

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Date: 25 October 2007

Dr Malcolm McKibbin
Accounting Officer
Department of Agriculture and Rural Development
Dundonald House
Upper Newtownards Road
Belfast
BT4 3SB

Dear Malcolm

Memorandum of Response: Control of River Pollution in Northern Ireland

The Committee has requested that I write to you for an update on the progress against the Department’s responses to the Committees conclusions, including the main conclusions, of the Public Accounts Committee report ‘Department of the Environment, Department of Agriculture and Rural Development: Control of River Pollution in Northern Ireland’.

I would be grateful if we could have your response by Friday, 23 November 2007.

Yours sincerely

John O'Dowd

John O’Dowd

Chairperson
Public Accounts Committee

Correspondence of 22 November 2007 from Dr Malcolm McKibbin

From: The Permanent Secretary Dundonald House
Dr Malcolm McKibbin Upper Newtownards Road
Belfast BT4 3SB

Tel: 028 9052 4608
Fax: 028 9052 4813
Email: malcolm.mckibbin@dardni.gov.uk

Mr John O’Dowd
Chairperson
Public Accounts Committee
Parliament Buildings
Room 371, Stormont
BELFAST
BT4 3XX Our Ref: PS/1495/07
Date: 22 November 2007

Dear Mr O’Dowd

PAC Report : Control of River Pollution in Northern Ireland

Thank you for your letter of 25 October 2007 requesting an update from the Department on progress against our responses to the Committee’s conclusions in its report on the Control of River Pollution in Northern Ireland.

Since the Public Accounts Committee report in 2001 the Department of Agriculture and Rural Development (DARD) has implemented a series of actions to reduce water pollution arising from agricultural sources.

The main actions are the introduction of regulatory controls on farming practice, capital grant support for improved slurry and manure storage facilities, training and support, pollution control advice and a significant increase in the DARD Agri-Environment programme.

Regulation – Nitrates Action Programme and Phosphorus Regulations

DARD has worked jointly with Department of Environment (DOE) to introduce Regulations to implement the EU Nitrates Directive. The Directive seeks to reduce or prevent diffuse water pollution caused by the application and storage of manure and inorganic fertiliser on farmland. It is designed both to safeguard drinking water supplies and to prevent wider ecological damage in the form of the eutrophication of freshwater. Eutrophication of rivers and lakes is a widespread problem in Northern Ireland and is caused mainly by nutrient losses from agriculture, sewage and industry.

Seven small Nitrate Vulnerable Zones (NVZs), covering a total of 120 farms, were designated due to elevated nitrate levels in groundwater, as required by the Nitrates Directive, in 1999 and 2003. However, extensive areas of Northern Ireland warranted designation as NVZs as they drain into waters which are eutrophic or nutrient enriched, primarily due to excess phosphorus rather than high nitrate levels.

To address this DARD and DOE developed an Action Programme of measures designed to control and/or prevent the run-off of both nitrates and phosphorus to the water environment from agricultural sources, which lead to nutrient enrichment. Stakeholders were actively involved in the development of the proposals and a regulation declaring a ‘total territory’ approach to the Nitrates Directive came into operation on 29 October 2004, meaning that an Action Programme of measures would apply across the whole of Northern Ireland.

Subsequently the Nitrates Directive Action Programme Regulations were agreed and came into operation on 1 January 2007. Key measures include a closed period for spreading slurry during the winter months, a minimum slurry storage capacity requirement for livestock farms and limits on the amount of slurry/manure and chemical fertiliser that can be applied to farm land.In addition, manures and chemical fertiliser can only be applied in suitable soil and weather conditions and at minimum specified distances from watercourses. The accompanying Phosphorus Regulations require that chemical fertilisers containing Phosphorus are only applied where a soil test demonstrates a crop need for additional phosphorus. Water quality monitoring in relation to the Nitrates Directive is carried out by DOE and reported every 4 years to the European Commission.

Capital Grant Support – Farm Nutrient Management Scheme

The Farm Nutrient Management Scheme (FNMS) was launched in January 2005 to assist farmers invest in new or improved slurry and manure storage facilities to comply with the Nitrates Directive and with the Control of Pollution (Silage, Slurry and Agricultural Fuel Oil) Regulations (Northern Ireland) 2003 (SSAFO Regulations). While the Nitrates Action Programme and Phosphorus Regulations deal with diffuse pollution, the large scale upgrading of farm infrastructure for slurry, manure and effluent storage to SSAFO standards through the FNMS should have significant benefits in reducing point source pollution incidents.

The Scheme provides grant aid of 60% on the first £85,000 of eligible expenditure and DARD has secured budget provision to fund all valid applications. Increasing slurry and manure storage capacity requires major investment on many farms and is the most significant cost associated the Nitrates Directive. The average FNMS project cost is approximately £50,000, with DARD providing £30,000 in grant aid and the applicant farmer investing £20,000.

Some 4,800 farmers applied to the FNMS and total grant aid is estimated to be in the region of £140 million. Over 2,200 applicants have received approval to commence work and around 1,000 projects have been completed and claimed to date. EU State Aid approval for the FNMS requires the completion of works by 31 December 2008 and DARD aims to issue all approvals by March 2008.

Training and Support for Farmers

DARD has provided Agri-Environment training for farmers through a Farm Advisory System. Since 2005 the College of Agriculture, Food and Rural Enterprise (CAFRE) has delivered over 750 environmental workshops which have been attended by 10,500 farmers. Workshops related to water quality include; complying with Nitrates and Phosphorus Regulations, nutrient management planning and dealing with farm waste. CAFRE has a target of 4,500 farmers to attend environmental workshops 2007/08.

In addition, a comprehensive range of support has been provided to help farmers comply with the Nitrates and Phosphorus Regulations. A guidance booklet was issued to all farm businesses in March 2007 and was supported by a telephone helpline. Online calculators are available to help farmers assess slurry/manure storage and production. A series of press articles on the main elements of the Action Programme is ongoing and advice on the Nitrates Directive has been and will continue to be a key feature of the DARD display at events such as the Balmoral Show and Winter Fair.

Pollution control advice for farmers

During the period 2001 – 2007, DARD Countryside Management Branch staff carried out more than 14,500 pollution control and waste management advisory visits on farms. This is designed to increase farmer competence in handling slurry, manure and other farm wastes, thereby minimising the possibility of a pollution incident.

Effective pollution control is a requirement of all agri-environment scheme agreements and Countryside Management Branch provide all scheme applicants with a farm waste management advisory visit. Since May 2005, the advisory visit has included guidance on the preparation and maintenance of a ‘Farm Waste Management Plan’. Prior to 2003/04, pollution control advisory visits were carried out in selected river catchments. Since that time, these advisory visits have been combined with other visits relating to agri-environment schemes.

Countryside Management Branch also provide pollution control advisory visits to farmers referred by EHS or their agencies following a pollution incident from a farm source. Although farm source pollution is responsible for approximately 25% of substantiated pollution incidents annually, there has been a year on year reduction in farm source pollution incidents since 2000 (Source DOE EHS Water Pollution and enforcement reports).

Code of Good Agricultural Practice for the prevention of pollution of water, air and soil

To provide practical guidance for farmers, outline responsibilities and best management practices to prevent farm source pollution, DARD published the Code of Good Agricultural Practice. It was issued to 32,500 farmers in March 2003. The Code is currently being revised and will be published early 2008.

Agri-Environment Schemes

DARD’s agri-environment schemes (the Environmentally Sensitive Areas Scheme and, after 2001, the Countryside Management Scheme) were the central element of the Northern Ireland Rural Development Plan (NIRDP) 2000-2006. These schemes support agricultural production methods which protect the water quality of rivers and lakes.

By the close of the NIRDP 2000-2006 some 13,000 farmers were participants in agri-environment schemes, with approximately 455,000 hectares of land under agreement. This represents a significant increase on the uptake in 2000 when just over 4,000 participants managed 136,000 hectares.

The Northern Ireland Rural Development Plan 2000-2006 agri-environment programme expired on 31 December 2006. The Countryside Management Scheme and Environmentally Sensitive Areas Scheme within this Plan are now closed to new applications. However, all existing scheme agreements remain in force and a new integrated agri-environment scheme will open in 2008, as part of the Northern Ireland Rural Development Programme 2007-2013. This will further extend the agri-environment programme’s ability to reduce water pollution from agricultural sources by providing enhanced water quality options.

Participants in the new scheme will continue to draw up obligatory farm waste management plans. In addition they will have the option of taking up new farm waterway and riverbank enhancement measures which aim to enhance river and riverbank biodiversity and help local agriculture meet the requirements of the EU Water Framework Directive.

Cross Compliance

Cross Compliance requires all recipients of the Single Farm Payment, and all farmers receiving funding under ‘Axis 2’ of the current Rural Development Plan (improving the environment and countryside), to abide by certain environmental standards as a condition of funding. A number of these standards relate to water pollution, including the Nitrates Directive and Groundwater Regulations. Cross compliance is expected to provide a firm baseline of environmentally-sensitive farming, on which the 2007-2013 agri-environment scheme programme will continue to build

I trust that the above information will bring the Committee up to date on the Department’s progress against the Committee’s conclusions and the actions it is taking to address water pollution. I am also sending a copy of this letter to my Minister and my counterpart in DOE.

Yours sincerely

D M McKIBBIN (Dr)

Accounting Officer

Chairperson’s letter of 13 December 2007 to Dr Malcolm McKibbin

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Public Accounts Committee
Parliament Buildings
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Tel: (028) 9052 1208
Fax: (028) 9052 0366
Email: cathie.white@niassembly.gov.uk

Date: 13 December 2007

Dr Malcolm McKibbin
Accounting Officer
Department of Agriculture and Rural Development
Dundonald House
Upper Newtownards Road
Belfast
BT4 3SB

Dear Malcolm

Re Memorandum of Response: Control of River Pollution in Northern Ireland

The Committee at today’s meeting has considered your response to the Memorandum of Response on the Control of River Pollution in Northern Ireland.

The Committee noted the update on progress on the undertakings given by the Department in the Memorandum of Response.

Yours sincerely

John O'Dowd

John O’Dowd

Chairperson

Chairperson’s letter of 25 October 2007 to Mr Stephen Peover

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Public Accounts Committee
Parliament Buildings
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BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

PUBLIC ACCOUNTS COMMITTEE

Date: 25 October 2007

Mr Stephen Peover
Accounting Officer
Department of the Environment
Clarence Court
10 - 18 Adelaide Street
Belfast
BT2 8GB

Dear Stephen

Memorandum of Response: Control of River Pollution in Northern Ireland

The Committee has requested that I write to you for an update on the progress against the Department’s responses to the Committees conclusions, including the main conclusions, of the Public Accounts Committee report ‘Department of the Environment, Department of Agriculture and Rural Development: Control of River Pollution in Northern Ireland’.

I would be grateful if we could have your response by Friday, 23 November 2007.

Yours sincerely

John O'Dowd

John O’Dowd
Chairperson
Public Accounts Committee

Correspondence of 20 November 2007 from Mr Stephen Peover

Correspondence of 20 November 2007 from Mr Stephen Peover

Correspondence of 20 November 2007 from Mr Stephen Peover

 

 

Correspondence of 20 November 2007 from Mr Stephen Peover

Correspondence of 20 November 2007 from Mr Stephen Peover

 

Correspondence of 20 November 2007 from Mr Stephen Peover

 

Correspondence of 20 November 2007 from Mr Stephen Peover

 

Correspondence of 20 November 2007 from Mr Stephen Peover

Correspondence of 20 November 2007 from Mr Stephen Peover

Chairperson’s letter of 13 December 2007 to Mr Stephen Peover

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Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366
Email: cathie.white@niassembly.gov.uk

Date: 13 December 2007

Mr Stephen Peover
Accounting Officer
Department of the Environment
Clarence Court
10 - 18 Adelaide Street
Belfast
BT2 8GB

Dear Stephen

Re Memorandum of Response: Control of River Pollution in Northern Ireland

The Committee at today’s meeting has considered your response to the Memorandum of Response on the Control of River Pollution in Northern Ireland.

The Committee noted the update on progress on the undertakings given by the Department in the Memorandum of Response. However, the Committee has some further questions as follows:

1. Your update on PAC conclusion 12 provides details of progress against the target your Department set itself of a 10% improvement by 2004 in the levels of compliance achieved by industrial discharges with the requirements of their discharge consents.

However, PAC recommended the setting of formal targets “with a view to achieving a level of compliance, within the medium term, that is consistent with the best performance in Great Britain”. The Committee would be grateful to receive details of the current best performance levels in Great Britain and how Northern Ireland dischargers’ compliance levels compare with them.

2. Your update on PAC conclusion 17 provides details of the numbers of NI Water installations that are now subject to discharge consents. The Committee would appreciate confirmation that the numbers quoted include all NI Water installations or, if not, details of numbers and types outstanding and a timetable for putting consents in place.

In addition, your response indicates that some extant consents have not yet taken effect. We should be grateful for details of the numbers and types of such consents, the timetable for activating them and the effect of the delays on NI’s ability to comply with the UWWT Directive.

3. Your update on PAC recommendation 36 notes that the Department made representations to the Courts Service in relation to the level of penalties levied against convicted polluters. The Committee would be interested to learn whether there was any improvement following the last such contact in 2001 and whether penalties levied by courts are now commensurate with the offences committed.

4. The Committee would also be interested to know what has been the year-on-year trend in the numbers and types of pollution incidents since 2001, what proportion of these has resulted in prosecution and what have been the outcomes.

I would appreciate a reply by Monday, 14 January 2008.

Yours sincerely

John O’Dowd

Chairperson

Correspondence of 11 January 2008 from Mr Stephen Peover

Correspondence of 11 January 2008 from Mr Stephen Peover

Correspondence of 11 January 2008 from Mr Stephen Peover

Correspondence of 11 January 2008 from Mr Stephen Peover

Correspondence of 11 January 2008 from Mr Stephen Peover

Correspondence of 11 January 2008 from Mr Stephen Peover

Chairperson’s letter of 3 March 2008 to Mr Stephen Peover

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Public Accounts Committee
Parliament Buildings
Room 371
Stormont
BELFAST
BT4 3XX
Tel: (028) 9052 1208
Fax: (028) 9052 0366

Date: 3 March 2008

Mr Stephen Peover
Accounting Officer
Department of the Environment
Clarence Court
10 - 18 Adelaide Street
Belfast
BT2 8GB

Dear Stephen

Memorandum of Response: Control of River Pollution in Northern Ireland

The Committee at the meeting on 28 February has considered the additional information provided in your letter of 11 January 2008 on the Memorandum of Response on the Control of River Pollution in Northern Ireland.

The Committee noted the further detail in your letter. However, the Committee considers that there are some issues relating to types or sources of incidents of pollution which they would wish to address when you next appear before the Committee.

Yours sincerely

John O'Dowd

John O’Dowd

Chairperson
Public Accounts Committee