Magazine article Public Finance

Way Ahead for WAO

Magazine article Public Finance

Way Ahead for WAO

Article excerpt

WALES' AUDITOR GENERAL offers sage advice on coping with the recession. Don't panic, but don't necessarily carry on just as before, Jeremy Colman says.

'The temptation when public bodies are told they have to save money is to panic and to cut things in a very unsystematic way,' he says. 'And to unduly favour established services and selectively cut areas such as research and investment. I'm not just talking about the public sector here.'

Examples he cites of 'silly' savings range from a council cutting back on hot drinks at meetings to a 1991 decision by Price Waterhouse (now PricewaterhouseCoopers), when he was a partner, to sack trainees as growth slackened.

Colman is critical of a current approach to saving that focuses on protecting the money that goes into the health service. 'The major parties are talking not about protecting the outputs from a hospital, but protecting the money they put in. It's not obvious that's the thing to do.'

Colman is not afraid to be different when it comes to efficiency or how an audit body should operate. This year the Wales Audit Office took a groundbreaking step when it commissioned a group of professionals to review its own operations.

He says audit offices need to show they are accountable. He admits he can 'get quite bad-tempered' when asked 'who guards the guards', as the arrangements for governance of the WAO are perfectly clear, if not well understood.

For the uninitiated, all of the statutory audit powers lie with the auditor general, rather than the WAO as an organisation. These powers and responsibilities reach across all of the activities of the public sector in Wales sponsored by the Welsh Assembly Government, across local authorities and the NHS. The WAO, which was formed out of the merger of the National Audit Office in Wales and the Audit Commission in Wales, has around 230 staff and an annual budget of £25m.

What seems to have prompted the decision to set up the review is a desire to show what type of organisation the WAO is - a shift from other audit bodies. The NAO in Wales 'operated on the principle of never apologise, never explain', Colman says, whereas the WAO is keen to show it applies the same standards to itself as it seeks to apply to other public bodies.

The decision to bring in an external body was praised by the review panel chair, Caroline Gardner, former CIPFA president and Audit Scotland deputy auditor general. She tells Public Finance that the organisation can be judged on this decision and it is 'a feather in its cap'. Despite being relatively new, the WAO has established a good track record and won praise from the review panel for its Good Practice Exchange service.

If one aim of the review was external looking, the other was internally focused. Colman has made no secret of problems within the WAO following its creation

'I was concerned that the inevitable turbulence of a merger was not settling down as quickly as it should and that suggested to me that we needed to change something.' One vote of confidence in this commitment was the Peer Review's statement that the WAO's own self-assessment was robust and honest.

Gardner says employee relations was 'where there was still most room for improvement, but we think the signs are Jeremy and staff have turned the corner'.

Staff discontent has surfaced on more than one occasion, with several articles appearing in Wales' national newspaper, the Western Mail, on the subject. Gardner says the review found a higher number of disciplinary and grievance cases than the panel or Colman would have liked and had faced a breakdown in partnership working with the trade union Prospect. …

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