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

News
people
News
A survey carried out by Sainsbury's Finance found 20% of new university students have never washed their own clothes, while 14% cannot even boil an egg
science...and the results are not as pointless as that sounds
News
politicsIs David Cameron trying to prove he's down with the kids?
News
Businessman at desk circa 1950s
news
PROMOTED VIDEO
Finacial products from our partners
Property search
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

    Ashdown Group: Client Services Manager - Relationship Management - London

    £30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

    Recruitment Genius: Credit Controller / Customer Service

    £18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

    Guru Careers: In-House / Internal Recruiter

    £25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

    Recruitment Genius: Tax Assistant

    Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

    Day In a Page

    Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

    Auschwitz liberation 70th anniversary

    Woman sent to three Nazi death camps describes surviving gas chamber
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore
    'I'm gay, and plan to fight military homophobia'

    'I'm gay, and plan to fight military homophobia'

    Army general planning to come out
    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea