The delays in approving WI business plans

I wrote on 26 November 2013, and again on that date, on 22 January 2014 and on 7 April 2014 about the extraordinary delays in having Waterways Ireland’s business plans approved by The Powers That Be. I saw it as poor practice that would make management’s job harder, with plans not being approved until very late in the year or even until after the end of the year to which they applied.

But, thanks to a statement by Jim Allister of Traditional Unionist Voice, I have been alerted to the possibility that the problem might be even greater than that. He points out that the NI Comptroller and Auditor General qualified the Resource Accounts of the Department of Culture, Arts and Leisure [DCAL] for y/e 31 March 2014 because the business plans for Waterways Ireland and the North/South Language Body were not approved in time. Jim Allister’s interpretation is perhaps a little overheated — the C&AG’s “irregular” becomes “illegal” and “unlawful” — so it’s worth looking in detail about what the C&AG actually said.

Sources

It’s very hard to find the DCAL Resource Accounts on the departmental website (which has a dreadful search engine) so here is a link [PDF]. I quote from them under the [UK] Open Government Licence [the link in the accounts omits a backslash].

Summary

In his Certificate of the Comptroller and Auditor General to the Northern Ireland Assembly on page 83 of the accounts, the C&AG, K J Donnelly, says:

Basis for qualified opinion on regularity

The Department is responsible for providing Annual Business Plans to the Department of Finance and Personnel in sufficient time to allow approval by the Minister of Finance and Personnel and the North South Ministerial Council prior to the commencement of the financial year to which the plan relates. As business plan approvals were not in place the Department has incurred irregular spend in 2013-­‐14 in relation to grants amounting to £3,213,000 paid to Waterways Ireland and £5,258,000 paid to the North/South Language Body.

The detailed account

The C&AG writes about this in more detail on pages 120 and 121:

2. Irregular Spend

2.1 The Department, along with the Department for Arts, Heritage and the Gaeltacht jointly sponsors Waterways Ireland and the North/South Language Body; both are North South Implementation Bodies set up under the North/South Co-operation (Implementation Bodies) (Northern Ireland) Order 1999 (the legislation).

2.2 The legislation requires each body to prepare an annual business plan that is subject to the approval of both Finance Ministers and the North South Ministerial Council. The legislation also states that the department may make grants to the body out of money appropriated by the Act of the Assembly and that such grants shall be of amounts and made on such terms and conditions as the department may, with the approval of the Department of Finance and Personnel, determine.

2.3 In order to comply with the legislation, sponsor departments are responsible for providing Business Plans to the Department of Finance and Personnel in sufficient time to allow approval by the Minister of Finance and Personnel and the North South Ministerial Council prior to the commencement of the financial year to which the plan relates.

2.4 Due to delays in the provision of Business Plans for some bodies, the Department of Finance and Personnel sought legal advice on the legitimacy of grants paid to the bodies prior to the approval of the plans. The Department of Finance and Personnel wrote to Accounting Officers on 23 May 2014 pointing out that failure to follow the outlined approval process in relation to grants made to North/South bodies has resulted in irregular spend.

2.5 The Department has advised me that given the timing of business plan approvals it has incurred irregular spend of £8,471,000 in 2013–14. This is made up of £3,213,000 in relation to Waterways Ireland and £5,258,000 in relation to the North/South Language Body.

Conclusion

2.6 As Business Plans have not received the required approval, there was no authority for this expenditure. I have therefore concluded that the expenditure was not in conformity with the authorities which govern it and qualified my audit opinion on regularity in this respect.

2.7 The Department of Finance and Personnel also indicated that if a department pays a cash grant to a North/South Body without the prior approval of the Department of Finance and Personnel then the department will have breached the provisions of the legislation and the expenditure is thus unlawful. However, there is conflicting legal advice on whether Department of Finance and Personnel approval has been provided in this regard. This is an issue which affects a number of departments and I would encourage this Department and others affected to further engage with the Department of Finance and Personnel to recolve this matter. I intend to keep this matter under review.

The Accounting Officer’s response

Peter May, the department’s Permanent Secretary, is its Accounting Officer. In his report he wrote about Governance Divergences arising in the Current Year on pages 79 and 80:

N/S Bodies

On 23 May 2014 DFP alerted departments which sponsored North South Bodies of concerns it had around the regularity and legality of grant payments made to these Bodies.

Regularity of payments — The Department accepts that N/S Bodies business plans  must be approved by the North South Ministerial Council in order for expenditure to be regarded as regular.

During 2013–14 DCAL incurred irregular spend in respect of grants to Waterways Ireland and the Language Body as business plans for these respective periods  have not been approved. It should be noted that draft business plans were in place against which the performance and budget of the bodies was monitored, and an approved Corporate Plan was in place for the period 2011–13.

Legality of payments — DFP has also raised concerns about these grants because they insist there is no record of formal DFP approval for the amounts of these grants or the terms and conditions under which they were made.

On the basis of legal advice, the Department considers the Estimates process and the negotiations between Finance Ministers on the efficiency savings show approval for the amount of the grant, while the Financial Memorandum provides the terms and conditions, which have not changed since 2005. This approach has been followed in good faith by DCAL on the basis of advice provided by DFP in 2009.

Full details of this spend is given Note SOAS 8.

SOAS8, on page 90, adds no useful information.

Jim Allister follows up

Jim Allister has two Priority Written Questions down on the matter:

AQW 35466/11-15 Mr Jim Allister (TUV – North Antrim): To ask the Minister of Culture, Arts and Leisure, in light of the Comptroller and Auditor General qualifying her Department’s Resource Accounts for 2013/14, whether she accepts that grant payments of over £8m made by her Department’s North/South Bodies were irregular; and if she will seek approval from the Department of Finance and Personnel for all such payments in accordance with the statutory requirements of the North/South Co-operation (Implementation Bodies) (Northern Ireland) Order 1999. [Priority Written] [04/09/2014 Awaiting Answer]

AQW 35541/11-15 Mr Jim Allister (TUV – North Antrim): To ask the Minister of Culture, Arts and Leisure whether she will place into the Assembly Library, a copy of the documentation received from the Department of Finance and Personnel (DFP), or otherwise recording DFP approval, which verifies the claim by her Department’s Accounting Officer in the Resource Accounts 2013/14 that DFP approval of grants to North/South Bodies was given for the amount of the grant at estimates or efficiency stage negotiations. [Priority Written]  [05/09/2014 Awaiting Answer]

WTF?

If I have understood him correctly, Jim Allister is most interested in whether DCAL was engaged in illegality; the department is, I think, rather defensive about the matter, but they can fight it out between themselves.

What interests me, though, is why DCAL could not approve the business plans in good time. Had it done so, and pushed them through the remaining regulatory hoops, it would have had no problem with either regularity or legality. Neither Corporate Plans, which cover three-year periods, nor draft business plans are acceptable substitutes for having the annual business plans approved in good time.

I don’t see, in either the C&AG’s or the Accounting Officer’s coverage, any explanation for the inordinate delays; they don’t say whether the problem is within DCAL, between DCAL and DFP or between DCAL and its southern counterpart, the Department of Arts, Heritage and the Gaeltacht. Wherever it lies, it needs to be sorted out.

 

2 responses to “The delays in approving WI business plans

  1. £8 million quid is rather a lot of money to leak out of the public purse without the right forms having been filled in. [Potentially defamatory sentences deleted] bjg

  2. Pingback: Jim Allister and WI’s business plans | Irish waterways history

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