A government department has taken the unusual step of
refusing to sign off a report by the public spending watchdog the
National Audit Office on an IT-based project, Computer Weekly has
learned.
Officials cannot remember any other time in the past 20 years
that any central government department has refused to sign off an
NAO report.
The Department for Environment, Food and Rural Affairs (Defra)
has given no formal agreement to a report of the NAO on its
value-for-money investigation of the
Single Payment Scheme.
The scheme is administered by the
Rural Payments Agency, which is part of Defra. It is supported
by a £350m system, which was built largely by Accenture to pay
about £1.6bn in subsidies to 116,000 farmers.
The NAO's
report, which was published last week, said that Defra and the
Rural Payments Agency had shown a "scant regard to protecting
public money" and that the scheme cost £1,743 per claim, which is
more than six times higher than the cost in Scotland where it is
£285 per claim. Defra disputes the figures.
Urgent action
In the past, the NAO has held off publishing reports until a
department or agency has given its sign-off - which has delayed the
publication of NAO reports on the NPfIT, the NHS's National
Programme for IT.
But
Amyas Morse, who was appointed the head of the NAO in June, is
signalling that he is not always prepared to delay reports to meet
a department's objections.
His auditors believe that urgent action is needed to stop the
Rural Payments Agency's IT systems overpaying farmers large
amounts. The Agency later seeks to recover the overpayments,
sometimes a long time later and without notice, and on occasions
without success.
A hearing of the Public Accounts Committee is scheduled to take
place on Monday 26 October, at which the civil service heads of
Defra and the Rural Payments Agency are expected to defend the IT
and the quality of the data in the system.
They are also expected to dispute the NAO's figures in what may
become a heated hearing over what is, and is not, fact.
Clearance process
Such a deep-seated disagreement between a department and the NAO
is rare, if unprecedented, since 1986 when the NAO agreed to have
its reports "signed off" by departments.
The clearance process, as it is called, was aimed at stopping
disputes over facts dominating hearings of the Public Accounts
Committee when MPs meet to question civil servants over reports
produced by the NAO.
Computer Weekly understands that departments and agencies
sometimes disagree with certain facts, and make this clear in a
letter to the NAO, but they still sign off the audit office's
report.
This time Defra has not signed off the entire NAO report, "A
second progress update on the administration of the Single Payment
Scheme by the Rural Payments Agency". The NAO regards Defra and the
Rural Payments Agency as "not cooperative enough".
Defra gave no reason for its refusal to sign off the NAO report.
Nobody at Defra was available for comment.
MP
Richard
Bacon, a member of the Public Accounts Committee, said of the
NAO's decision to publish its report on the Single Payment Scheme
without the agreement of Defra: "I think it is a sign of
Amyas Morse's new broom that he's not prepared to accept
delaying tactics from departments."
The NAO's third report on the Single Payment Scheme was its
most hard hitting.
Clear expectations
Phil
Gibby, an NAO director, was asked at a press conference last
week whether Defra and the Rural Payments Agency would heed the
report's recommendations, given the NAO's uncertainty over whether
decisive action had been taken after its previous
recommendations.
"This is a much stronger report than we have produced before,"
he said. "We have made it very clear what we expect to be
done."
But Gibby added that the NAO cannot force Defra or the Rural
Payments Agency to act. The NAO has its "frustrations" over the
lack of decisive action by the department.
An NAO spokesman emphasised the importance of the "clearance"
process, which he said will continue. Clearance makes it less
likely that the government will dismiss an NAO report as
inaccurate.
NAO findings
These are some of the NAO's findings on the Single Payment
Scheme:
"We consider the scheme's IT to be very expensive."
"Heavy customisation of the IT systems has resulted in very
complex software which is expensive to modify and maintain, and has
increased the risk of obsolescence. For example, any further
upgrades in response to policy initiatives from the European
Commission will be expensive to implement."
"Around a third of the changes made to the finance system have
been 'invasive', requiring changes to the [Oracle] source code,
although the Agency did not keep an accurate record of all the
changes made."
"The degree of changes to the system has created other problems.
The involvement of Agency staff in the original implementation of
the system blurred responsibilities with its contractors, leading
to a lack of clarity over who is liable if the system goes
wrong."
"In view of the heavy customisation of systems since then, we
have been unable to gain adequate assurance over what redress would
be available for any potential system failures in future.
"Despite the changes that have taken place, scheme payments show
little sign of increased accuracy, with estimated overpayments of
£24.3m and underpayments of £38.8m in scheme year 2008."
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