Report on the Estimates of the Northern Ireland Audit Office and the Northern Ireland Public Services Ombudsman 2020-21

Together with related correspondence considered by the Committee.

Ordered by the Audit Committee to be printed on 10 September 2020

Report: NIA 41/17-22 Audit Committee

Committee Powers and Membership

1. The Audit Committee is a Standing Committee of the Northern Ireland Assembly established in accordance with Section 66 of the Northern Ireland Act 1998 and Assembly Standing Order No. 58. The Committee has 5 members including a Chairperson and Deputy Chairperson and a quorum of 2.

2. The Committee:

• Exercises the functions mentioned in Section 66(1) of the Northern Ireland Act 1998. The Committee therefore agrees, in place of the Department of Finance (DoF), the estimates of the Northern Ireland Audit Office (NIAO) and lays them before the Assembly;
• Is responsible for tabling a motion for a resolution of the Assembly relating to the salary payable under Article 4(1) of the Audit (Northern Ireland) Order 1987 to the holder of the office of the Comptroller and Auditor General (C&AG);
• Exercises the functions mentioned in sub-paragraphs 18(2) and (4) of Schedule 1 to the Public Services Ombudsman Act (Northern Ireland) 2016 in respect of the Northern Ireland Public Services Ombudsman (NIPSO); and
• May exercise the power in Section 44(1) of the Northern Ireland Act 1998.

3. The Chairperson of the Audit Committee also has a lead role in the recruitment of the C&AG.

4. In 2016, the Northern Ireland Assembly Commission (NIAC) and the DoF sought to reflect the constitutional independence of the Assembly from the Executive. This led to the development of a draft methodology/protocol for setting the Commission’s budget. The methodology sets out an approach that is akin to the approach adopted for the NIAO and NIPSO, whereby the Audit Committee provides scrutiny and challenge to the Commission’s expenditure plans and reports accordingly, in recognition of the independence of the Commission. The Committee fulfils this role in place of the DoF.

5. The membership of the Committee is as follows:

Mr Daniel McCrossan (Chairperson)

Ms Joanne Bunting (Deputy Chairperson) ¹

Mr Jim Allister ²

Mr Alan Chambers

Ms Emma Sheerin

Contents

• Report
• Appendix 1 -Northern Ireland Audit Office Estimate 2020-21 (available in the PDF version of the report)
• Appendix 2 - Northern Ireland Public Services Ombudsman Estimate 2020-21 (available in the PDF version of the report)
• Appendix 3 - Related correspondence considered by the Committee (available in the PDF version of the report)

Report 

Introduction

1. Article 6(2) of the Audit (Northern Ireland) Order 1987 provides for the C&AG to prepare for each financial year an estimate of the use of resources by the NIAO.

2. Section 66 of the Northern Ireland Act 1998, and Standing Order 58(1), provide for the Assembly’s Audit Committee (in place of the DoF) to lay that estimate before the Assembly. The Committee may agree modifications to the estimate with the C&AG before laying the estimate in the Assembly. In carrying out this function the Committee has regard to the advice of the Assembly’s Public Accounts Committee (PAC) and the DoF.

3. Paragraph 18 of Schedule 1 to the Public Services Ombudsman Act (Northern Ireland) 2016 provides for the Ombudsman to prepare for each financial year, other than the first, an estimate of the use of resources by the office of the Ombudsman. That estimate must be submitted to the Assembly’s Audit Committee (in place of the DoF). The Committee in considering that estimate must have regard to the advice of the DoF. The estimate is, subject to any modification agreed between the Audit Committee and the Ombudsman, laid before the Assembly by the Committee.

4. This report sets out, at Appendix 1 and 2, the agreed estimates for both the NIAO and NIPSO for 2020-21 (note: the NIAC estimate 2020-21 is not included in this report given that the current draft protocol for setting the Commission’s budget differs in that regard to arrangements for the NIAO and NIPSO. Moreover, the Committee’s functions in respect of agreeing the NIAC budgets and estimates have not yet been codified in statute or in Assembly Standing Orders).

Background to the current estimates

5. The Committee began its scrutiny of the draft Budgets 2020-21 for the NIAO and NIPSO at its meeting on 13 February 2020. The Committee fulfils this role in place of the DoF in recognition of the independence of the non-Ministerial bodies.

6. The Committee received written submissions and took oral evidence from both the NIAO and NIPSO on: their respective draft corporate/strategic plans; their 2019-20 year-end position; and their preparation for draft Budget plans 2020- 21.

7. On Thursday 5 March 2020, the Committee agreed its report on the draft Budget 2020-21 position for the NIAO, NIPSO and NIAC. The report, which was laid in the Assembly Business Office, circulated to all Assembly Members and sent to the DoF, confirmed that the Committee had agreed that the Executive’s budget should make provision for the figures as set out in the report.

8. Arising from its scrutiny of the NIAO’s draft budget plan for 2020-21, and having regard to the advice of the DoF and PAC, the Audit Committee agreed that, the Executive's draft Budget 2020-21 should make provision for the NIAO having a Resource budget of £10,965K and a Capital budget of £330K in 2020-21. It was subsequently noted by the Committee that the resource budget amount was the gross resource expenditure and that the figure announced in the Executive’s budget 2020-21 would be the Non Ring-Fenced Resource Departmental Expenditure Limit (RDEL).

9. Arising from its scrutiny of the NIPSO’s budget plan for 2020-21 and having regard to the advice of the DoF, the Audit Committee agreed that the Executive's draft Budget 2020-21 should make provision for the NIPSO having a Resource budget of £3,319K and a Capital budget of £90K in 2020-21. It was subsequently noted by the Committee that this amount of resource budget was the Non Ring-Fenced RDEL and as per the figures announced in the Executive’s budget 2020-21.

10. The figures agreed by the Audit Committee for the NIAO and NIPSO were subsequently included in the Executive’s final Budget 2020-21 which was announced by the Finance Minister on 31 March 2020. 

The Estimate Process 2020-21

11. It was anticipated that the Main Estimates process, which gives legal effect to the Executive’s Budget, would be concluded, as normal, ahead of the Assembly summer recess; however, this process was postponed due to the public health crisis. On 7 August 2020, the DoF wrote to advise that the Main Estimates will be brought to the Assembly in September (Appendix 3).

NIAO Estimate 2020-21

12. The C&AG has prepared an estimate of the use of resources by the NIAO for 2020-21 and this was submitted to the Committee on 7 August 2020. The estimate includes a request for resources by the NIAO for “audit and assurance services; promoting economy, efficiency and effectiveness in the use of public funds and resources; conducting exercises to assist in fraud prevention and detection; severance payments; expenditure on activities that are required as a result of the United Kingdom’s exit from the European Union; Governmental response to the coronavirus Covid-19 pandemic; administration and related services and associated non-cash items.”

13. The estimate is attached at Appendix 1 and is consistent with the figures set out in the Executive’s Budget document, as explained in the correspondence from the DoF dated 7 August 2020 and the accompanying reconciliation information provided by way of explanation by the Department in this correspondence (Appendix 3).

14. As per agreed protocols, the Audit Committee gives due regard to advice from both the DoF and PAC on the NIAO estimate. The advice provided is included at Appendix 3. In the correspondence from the DoF dated 7 August 2020, the Department has referred to comments which it provided on 26 February 2020 in relation to the NIAO’s draft Budget 2020-21. A view on the NIAO’s draft estimate 2020-21 was also sought from the PAC and, given the tight timetable indicated by the DoF, the Audit Committee agreed the estimate subject to any advice received from the PAC³.

NIPSO Estimate 2020-21

15. The Ombudsman has prepared an estimate of the use of resources by the NIPSO for 2020-21. The estimate provides for expenditure by the NIPSO on “investigating complaints of injustice suffered through maladministration by government departments, statutory agencies, public bodies, local government and health and social care bodies, general and independent health care providers, colleges, universities and boards of governors of grant-aided schools; investigating and adjudicating on complaints on local government ethical standards against councillors and return of unspent funding; severance payments; expenditure in response to the coronavirus Covid-19 pandemic; expenditure on activities that are required as a result of the United Kingdom’s exit from the European Union; administration; backdated holiday compensation payments and related services and associated non-cash items.”

16. The estimate, which was provided by the NIPSO on 6 August 2020, is attached at Appendix 2 and is consistent with the figures set out in the Executive’s Budget document, as explained in the correspondence from the DoF dated 7 August 2020 and the accompanying reconciliation information provided by way of explanation by the Department in this correspondence (Appendix 3).

17. As per agreed protocols, the Audit Committee gives due regard to advice from the DoF on the NIPSO estimate. The advice provided is referred to in correspondence from the Department dated 7 August 2020 at Appendix 3. The DoF has referred to comments previously provided by the Department on 26 February 2020 in relation to the NIPSO’s draft Budget 2020-21.

Committee consideration

18. The Audit Committee has therefore considered the draft estimates 2020-21 from the NIAO and NIPSO alongside correspondence from the DoF (in particular the reconciliation explanation provided). It was noted that the figures in the estimates reflect the figures agreed previously by the Audit Committee in its report on the draft budgets for the NIAO and NIPSO.