Office of the Comptroller and Auditor General - Press release VFM examination report on Consultancies in the Civil Service

Value for Money Report Number 22

Consultancies in the Civil Service

The Comptroller and Auditor General, Mr. John Purcell, has undertaken an examination of the use of consultants by government departments and offices over the period 1994 to 1996. The examination looked at how economically consultancy services are acquired and how efficiently they are managed. The way in which departments and offices arrive at the decision to use consultants was also examined.

A report on the examination was presented to Dáil ?reann on 10 June 1998. The main findings of the examination are summarised below.

Until the examination was carried out, there was a dearth of information about the use of consultancies in the civil service or about the amount of money being spent. A survey of all departments and offices identified almost 1,000 consultancies carried out in the period 1994 to 1996. These cost an estimated ?63 million. Seven major consultancies accounted for over half of the total cost.

A central database of consultancies should be set up for the purpose of better informing the selection process and improving the management of consultancies.

The types of work undertaken by consultants included the provision of professional advice, policy reviews, market research, development of information technology systems and reviews of the operation and organisation of departments. Over 60% of consultancies were commissioned because the required skills were not available within the relevant department or office. A further 31% were commissioned to get an independent or objective view of the issues studied.

There was very little evidence that departments gave due consideration to the likely cost-effectiveness of the use of consultants.

In almost a quarter of consultancies examined in detail, the contract was awarded without inviting proposals from more than one consultant. It is contended that in many of these cases, there was only one consultant qualified to complete the work. In other cases, it was suggested that the repeated use of certain consultants was due to the need for continuity.

The cost of the time spent by the staff of the department or office liaising with consultants and carrying out the day-to-day management of projects is estimated to be equivalent to almost 20% of the contract amount paid to the consultants.

Four out of five consultancy contracts were agreed on the basis of a fixed price for the work to be undertaken. Fixed price contracts did not always limit the amount paid. Over one third of large consultancies (i.e. costing between ?100,000 and ?1 million) exceeded their ‘fixed price’.

Departments and offices should assess the impact of consultancies on their operations after a suitable lapse of time. This was rarely done in a meaningful way, with the result that the effectiveness of spending on most consultancies was not established. As part of the survey, departments and offices were asked to provide details of consultancy projects which produced identifiable savings as a result of the consultants’ work. Most departments and offices were unable to identify any such savings.

For further information about the report contents, please contact:

Fergus O’Brien at +353 (0)1 679 3122 or fergus_obrien@audgen.irlgov.ie

Government Publications Sales Office

Sun Alliance House

Molesworth Street

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The contents of this page were last updated on 26/09/03