Value for Money Examination  32:  Impact of Value for Money Reports 1994-1996   Summary

The effectiveness of value for money (VFM) examinations depends on the success of the accountability process which VFM reports serve and on the impact which the reports have on improving the activities of the bodies examined. This report considers the impact of the first sixteen VFM reports produced between December 1994 and 1996.

Achieving value for money requires a strategic framework which allows for the specification of the objectives of organisations and of criteria by which the extent to which the objectives are met can be assessed. In the Irish civil service the essential elements of such a strategic framework are being developed through a series of reforms referred to as the strategic management initiative (SMI).

The sixteen VFM reports predate the implementation of SMI and, accordingly, the extent to which impact can be assessed is limited. In this report, specific impacts achieved by individual VEM reports and more general impacts, common to all departments and offices, are considered. The Department of Finance has stated that it is evident that VFM studies have contributed to actual savings in specific sectors and to a greater cost consciousness in general in the expenditure of Oireachtas moneys.

Specific impacts

The sixteen reports covered a wide range of issues dealing with economy, efficiency, project management and the assessment of effectiveness.

The principal impacts associated with economy were concerned with identifying the potential for saving money through centralising the procurement function or through the substitution of cheaper resources for more expensive resources, without a loss of quality. Some substantial savings in energy costs in the health sector and in procurement by the Garda SiochAna and by universities were noted. Specific cases where savings were achieved or the quality of service improved through substitution were also noted. However, where staff substitution is involved the achievement of economies is more complicated. The need to develop effective staff performance management systems and the potential for achieving economies through the use of the private sector are recognised but changes in employment structures and practices can only be brought about in the public service through partnership which is the lynchpin of Government policy in this area.

The VFM reports dealing with efficiency looked at organisational and administrative efficiency and at systems efficiency. Positive impacts were noted in the case of the transfer of responsibility for the borrowing and treasury management activities associated with FEOGA from the Department of Agriculture and Food to the National Treasury Management Agency. Some operational improvements were also noted in the Ordnance Survey and in the arrangements for administering the second LEADER programme. Less immediate impact arose from the report on Means Testing but the issues raised in the VFM report are being addressed by the Department of Social, Community and Family Affairs as part of a wider modernisation strategy.

The VFM reports dealing with project management issues covered a diverse range of projects and found weaknesses in each of the key stages of the project life cycle. As the reports are retrospective reviews of once-off projects the most beneficial impact to be expected is for improvement in guidance material for future projects. This has been noted in the case of the development of project management plans for civil engineering projects and an increase in post project review activity. As a consequence of the Collins Barracks VFM report, the Department of Finance wrote to Accounting Officers to reiterate the benefits to be achieved from proper planning and control of projects.

Arrangements for the direct assessment of the effectiveness of the operations of Government Departments and Offices are underdeveloped and this limits the scope of VFM activity in this area. The principal impacts arising from the three reports dealing with effectiveness evaluation have been improvements in the data availability and monitoring arrangements for the areas covered.

General Impacts

Inadequacy of systems for performance information The inadequacy of data collection to support the provision of meaningful performance information is a recurring theme in many of the sixteen reports. While this problem is being assessed in the specific cases highlighted, the overall progress in the development of improved performance reporting has been disappointing.

The period covered by the sixteen reports predates the initiative for the production of statements of strategy and business plans by government departments and offices. These strategic documents make a potentially important contribution to the value for money environment as they should clarify the objectives of programmes and identify the performance measures and indicators by which achievements can be assessed. However, much more work is needed in the development of standards and supporting systems to underpin the routine production of performance reports.

Administrative Budgets

The administrative budgets initiative was an early attempt to achieve efficiency by devolving some administrative spending responsibility to Departments and building in an expectation of a 2% efficiency dividend.

The implementation difficulties highlighted by the VFM report on administrative budgets were taken up in a revision of the system for the third round of agreements covering the period 1999 - 2001. The new round of agreements also benefit from the availability of strategy statements and plans and from moves to a multi-annual budgeting system. This reflects the interdependence between many of the reform initiatives envisaged in SMI and the need to manage the progress of reform in an integrated and co-ordinated manner.