The National Audit Office perspective: Police Audit Louise Bladen - - PowerPoint PPT Presentation

Helping the nation spend wisely

The National Audit Office perspective: Police Audit

Louise Bladen Director, Home Affairs Value for Money audit June 2014

Helping the nation spend wisely

The NAO’s audit responsibilities in the police sector

Helping the nation spend wisely

Our role

The National Audit Office (NAO) scrutinises public spending for Parliament. We help to hold government departments and the bodies we audit to account for how they use public money. Our work helps public service managers to improve performance and service delivery, nationally and locally. We are totally independent of government.

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Our remit for police audit

• We do not audit or inspect individual police forces –

those roles are performed by others.

• We hold the Home Office to account for its use of

public money – much of which goes to the police in the form of grant funding.

• In practice this means that our VFM style reports on the

police sector will look at thematic issues.

• Recent publications include:
• Police accountability: landscape review (Jan 14)
• Private sector partnering in the police service: best practice guidance

(July 2013)

• Police procurement (March 2013)
• Mobile technology in policing (January 2012)

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New local audit arrangements

• The Local Audit and Accountability Act which received assent

January 2014, gives the Comptroller & Auditor General (C&AG) new responsibilities relating to local audit.

• From 15-16 onwards the NAO will prepare and maintain the Code
• f Audit Practice and will produce detailed guidance to local

auditors to which they should have regard.

• The Act also clarifies the C&AG’s powers to undertake work

regarding the economy, efficiency and effectiveness with which local public bodies have used their resources and provides statutory access to information held by these authorities in support of such work.

• This statutory access to information now includes Police and

Crime Commissioners.

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Our work on Police Accountability

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Aim and scope of our report

• NAO published Police Accountability: landscape review January 2014. See

http://www.nao.org.uk/report/police-accountability-landscape-review/

• This timing allowed us to review the new accountability structures (post

PCC elections) after they had been in place for just over a year.

• The way in which accountability works in terms of roles, responsibilities and

powers and how the Home Office can assess whether the system is working and what will happen in the event of failure is captured in the Accountability System Statement for Policing and Crime Reduction

• We judged it was too early to conclude on whether the new arrangements

will provide the Home Office with assurance that the police sector is achieving value for money.

• Our landscape review approach was designed, therefore, to describe the

changes to the police accountability landscape and identify potential risks to, and opportunity for, achieving value for money arising from them.

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Overview of the accountability system

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Overall conclusion

“The new policing framework has been in place for only just

• ver a year but already it is clear that there are gaps in the

system with the potential to undermine accountability both to the Home Office and the public. More work is needed to ensure that all elements of the framework are working effectively to minimize risks to value for money.” Amyas Morse, Comptroller & Auditor General 22 January 2014

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Key findings – new system compared to police authorities

• Elected commissioners are potentially better able to hold police

forces to account and drive value for money than previous police authorities.

• Elected commissioners have observed a significant increase in

engagement with the public than under the previous system.

• The new system provides more scope for local tensions to arise e.g.

job boundaries, working relationships.

• There is increased local flexibility bringing risks as well as
• pportunity – e.g. scope for forces to innovate and respond to local

priorities but challenging for public to benchmark.

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Key findings – potential gaps in the framework

• At time of publication HMIC did not have statutory

authority to inspect PCCs. The Home Office has recently changed this in response to our recommendations.

• Police and Crime Panels lack powers to act on

information they receive meaning there are few checks and balances on PCCs between elections.

• Nationwide, six PCCs share a chief financial officer with

their force, raising a potential conflict of interest

• Gap between reliance placed by Home Office on external

auditor scrutiny and work actually undertaken, creating a risk that the Home Office is not fully sighted on potential risks to VfM at the local level.

• Commissioners are not publishing all the data required of

them limiting the public’s ability to hold them to account.

• Concerns around usability of HMIC’s available

benchmarking data for the public.

2012 Accountability System Statement for Policing and Crime Reduction

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Detailed findings on accounting and auditing practices

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Our findings on changing accounting practices

• A key theme in our report was the extent of local

variation which reforms had generated - preparation of accounts by forces and PCCs was an example of this local variation.

• We heard concerns that splitting the accounts had

created unnecessary work and expense – previously

• ne set of accounts, now three.
• The reforms had created unanticipated differences

between PCCs and chief constables which needed to be resolved – for example VAT differences.

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Our findings on changing auditing arrangements

• Changes to the police accounting landscape coincided

with the outsourcing of police audits from the Audit Commission to private sector firms.

• An absence of detailed and timely guidance on the

application of the framework for the new local police bodies and their auditors in 2013 led to differing interpretation and application of accounting requirements.

• In particular this was an issue around how to reflect the

two corporations’ sole set-up.

Helping the nation spend wisely We examined accounts for 18 different police force areas for 12-13 and found significant variation in accounting practices

Number

• f force

areas Chief Constable’s account status Pension account held in? OPCC and group accounts the same? 1 Dormant Both Yes 5 Dormant Commissioner only Yes 1 Dormant Unknown Yes 1 Active Both Unknown 4 Active Both Yes 2 Active Both No 1 Active Chief Constable only No 1 Active Commissioner only Yes 1 Active Commissioner only No 1 Active Commissioner only Unknown

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It was difficult to compare accounts across the sector

• Chief Constable’s accounts had nil values on their statements in some

areas with all expenditure and cash flows kept in the OPCC accounts – the principal agent argument.

• In contrast, in other areas, revenue spent by the Chief Constable on behalf
• f the PCC had been incorporated into the police force accounts.
• In different local areas the pension account has been disclosed separately

in the accounts of either the Chief Constable or the PCC.

• The Home Office believe the reason for different interpretations is around

lack of clarity as to whether Chief Constables should receive the same accounting treatment as local authorities.

• The Home Office believe this will have been resolved through a

Transitional Provision Order laid September 2013 which states that Chief Constables should be treated as local authorities for accounting purposes.

• For 13-14 there is now updated guidance from CIPFA and an Audit

Commission policy briefing – this should promote much greater consistency around accounting treatment with a clear steer away from the principal agent approach.