Is the end nigh? Nay

Public-Sector Finance Paul Gosling finds the District Audit alive and kicking - and improving

When the Butler review of the Audit Commission was published in August some expected it to mark the beginning of the end for District Audit, the commission's arm's-length agency that conducts 70 per cent of local authority, health authority and NHS trust audits.

Jim Butler, author of the report, said that district auditors should be chosen on merit, and told the Independent that he favoured competitive tendering being used for all contracts. With District Audit winning only one out of eight contracts in the initial tranche of market testing, the writing seemed to be on the wall for District Audit, with some private firms looking forward to picking up more public work.

But it looks as though District Audit will be around for a long time to come, after all. While the commission has welcomed the Butler review and accepted its recommendations, this has not extended market testing beyond the fairly limited scope that had been embarked on, which will alter the 70/30 public/private split only gradually.

"We have standard targets of 1 to 2 per cent market testing of contracts per year," says an Audit Commission spokesman. "We must get the audited bodies to agree to this, we can't just impose this on them, and there are strict eligibility criteria."

The commission is just releasing the specifications for the next batch of market testing, for agreement with the audited bodies, in this case five NHS trusts in Wales. That contract will be awarded in April next year, for commencement a year later. A similar process for the London boroughs and the metropolitan councils will begin in December 1996.

David Prince, chief executive of District Audit, says: "It is a matter for the commission to decide how far it goes with market testing, but it is not without cost. You can get most of the benefits of the programme without increasing overheads." The lessons learnt from a restricted market testing programme can be passed on to all clients.

The view that there is no need to introduce competitive tendering for all audit contracts receives surprisingly little criticism from the private firms. Price Waterhouse's spokesman says: "We are comfortable with the way things are." He adds that historically they won a large amount of the 30 per cent of work not carried out by District Audit.

Mr Prince stresses that District Audit is in a good position to cope with private-sector competition, having learnt a lot from the initial market testing exercise. He believes the greatest weakness displayed was DA's poor presentation skills, which have since been strengthened.

The Butler review, though, focused on other weaknesses, pointing out that the high-quality Audit Commission national value-for-money reports were not being translated effectively into local situations, blaming a weakness in relations between the commission and local district auditors, whether from DA or private firms.

Mr Prince believes that these problems had already been recognised, and were being resolved. "We are putting a greater emphasis on specialists and changing our skills mix, bringing people in on secondment," he says.

"We use a lot of people who are not auditors, we have more than 200 people who have non-financial disciplines from the public and private sectors, such as teachers, health managers and doctors, and we are making increasing use of them. Auditors are then that much closer to the bodies they are auditing. We want to tailor studies to the needs of the organisation we are auditing.

"We have been working on our own change programme for just over a year, since we became an agency. The Butler report reinforces the direction we are already going forward in."

Mr Prince points to DA's local value-for-money reports that have recently led to big savings. The London fraud initiative saved pounds 2m in just one borough, by matching names on computer databases across the city, finding people who were making multiple student grant and housing benefit applications.

Another study found some highways authorities could save pounds 50,000 annually by replacing bulbs in street lights half as often or, in other instances, by using a different type. And a DA investigation into computer security found that hospitals and local authorities were vulnerable to outside hackers as well as unauthorised access within organisations, and gave clients a free computer programme to create an audit trail of illicit data access.

"At the moment market testing affects a relatively small amount of our work," says Mr Prince. "We have been concentrating on developing new products as we want to give all our audited bodies the benefits of our thinking."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Voices
Ed Miliband and David Cameron are neck and neck in the polls
election 2015Armando Iannucci: on how British politics is broken
News
i100
Life and Style
Great minds like Einstein don't think alike
tech
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
health
News
science
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
News
Chuck Norris pictured in 1996
people
Arts and Entertainment
Sarah Lucas, I SCREAM DADDIO, Installation View, British Pavilion 2015
artWhy Sarah Lucas is the perfect choice to represent British art at the Venice Biennale
News
A voter placing a ballot paper in the box at a polling station
i100
News
people
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

    £20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

    Ashdown Group: Marketing Executive - 6 month FTC - Central London

    £25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

    Ashdown Group: Junior Project Manager (website, web application) - Agile

    £215 per day: Ashdown Group: Junior Project Manager (website, web application ...

    Guru Careers: Software Engineer / Software Developer

    £40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

    Day In a Page

    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

    On the margins

    From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'
    Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

    Flesh in Venice

    Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
    11 best anti-ageing day creams

    11 best anti-ageing day creams

    Slow down the ageing process with one of these high-performance, hardworking anti-agers
    Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

    Juventus vs Real Madrid

    Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
    Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

    Ashes series looks a lost cause for England...

    Whoever takes over as ECB director of cricket, says Stephen Brenkley
    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power