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October 2011

Dizzy heights

INTOUCHThe National Audit Office Alumni Newsletter

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Record graduate applications!The campaign year October 2010 – June 2011 saw record numbers of people applying for our graduate scheme. In fact, there were so many that we had to close the website early and postpone many applications until we were ready to start the 2012 campaign!

Whilst the current job market and the excellent benefi ts package that we offer appear to be a major contributor to our success, we would also like to think our in-house design and marketing team had an infl uence too.

For the past two years we have created our own bespoke marketing campaign to attract graduates to the NAO. By bringing this work in-house instead of using an external agency, we have saved the offi ce a considerable amount of money, but also remained true to our own ethos and culture of retaining our independence.

Our ‘Big on’ campaign has run for two years and is designed to make potential employees feel valued from the application stage, and an integral part of the NAO once they have joined. It highlights the benefi ts that working within a highly skilled yet relatively modest sized organisation brings, as opposed to choosing an organisation where employee numbers are so high it must be quite a challenge to have your achievements noticed.

The ‘Big on’ campaign was so strong that it was nominated for ‘Best Graduate Recruitment Campaign’ at the Chartered Institute of Personnel Development awards last year, alongside KPMG, Barclays Capital, Grant Thornton and QinetiQ.

Although Barclays Capital won the award on the night, our campaign was separately recognised and highly commended by the judging panel. In addition, our budget was minute in comparison to our private sector competitors so we still felt like winners!

Finally, with that record number of applications, we were able to select the very best to be part of our new intake of 70 graduates, and welcomed them to the NAO on 5th September.

Welcome

Sarah Threapletonsarah.threapleton@nao.gsi.gov.uk

Laura Joneslaura.jones@nao.gsi.gov.uk

Santosh Gorasantosh.gora@nao.gsi.gov.uk

Joanna Carabottjoanna.carabott@nao.gsi.gov.uk

Johanne Penneyjohanne.penney@nao.gsi.gov.uk

Tania Phillipstania.phillips@nao.gsi.gov.uk

Sharon Douradosharon.dourado@nao.gsi.gov.uk

I hope you have enjoyed the past few months since our last magazine; we have certainly been very busy this summer and this edition of InTouch details news on what we and you have been doing to take our minds off the lacklustre summer we have experienced this year!

Charity has been a strong theme; from various NAO staff volunteering at the Passage, a homeless centre in Victoria, to a brave and admirable climb up Mount Kilimanjaro by our dedicated Kirsten Payne.

We also have a very animated and engaging article from ex-NAO director Patricia Leahy who, since leaving the NAO, has become a London magistrate. We also gain an interesting insight on what it’s like sitting on the NAO Board, from Sir Andrew Likierman.

We believe the NAO’s profi le has increased, as this year we have received record-breaking graduate applications. We carried out all the marketing in-house, which has helped us to continue to develop our expertise and hone new skills. Along the same theme we bring you a light-hearted and amusing article written by our new interns which includes what it is like on the real inside – attending the NAO pop quiz!

Finally I would like to thank our contributors this month; Steve Mirfi n, Leanne Miller, Andrew Likierman, Patricia Leahy, Sarah Farndale and Anne Graham.

Jo Penney

Design and Production by NAO Communications© National Audit Office 2011Printed by SLS Print

We’re on Linkedin and FacebookThe NAO Alumni Group is on Facebook and Linkedin. This is another opportunity to keep in touch, and we will be using it to announce

events and post photos. Come and join us! Please go to www.facebook.com or http://www.linkedin.com and search for National Audit Offi ce Alumni Group to sign up.

Got a bit of time to spare?We would love to hear your suggestions for items for InTouch. If you would like to write a feature, have an idea for a story you would like covered, would like to nominate someone for the Q&A, or would simply like to write us a letter, please get in touch with a member of the Alumni Team.

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Civil Service Live 2011

The question above was posed to visitors at our stand at this year’s Civil Service Live event.

Civil Service Live is an annual three-day event aimed at UK civil servants and is ‘the largest gathering of civil servants designed to inspire innovation and promote best practice across all government departments and agencies’. This is the fourth time we have participated in this event and our aims this year were: zz To show how the NAO is a driver for

improvement and that our insights can help government.zz To communicate our three themes of

financial management and reporting, informed government and cost effective delivery and what we are trying to achieve and why.zz To increase awareness of the NAO’s

practical resources that are available to all public bodies.

zz To build a database of people interested in NAO work by recording names and email addresses of people who visited the stand.

Our stand’s main ‘feature’ was a voting game where people indicated their biggest challenge by using an interactive ‘voting’ system of four Perspex tubes into which counters were dropped. This low-tech approach was eye-catching and proved to be a big attraction to the stand. It certainly did the trick of acting as a conversation starter, which was really our aim, rather than to conduct any kind of serious survey.

Once visitors had voted, our stand staff took the opportunity to talk to them about our products and get their email details if they wanted to be kept up to date about our work. The C&AG, Amyas Morse, took part in a panel discussion on transparency on the second day, and also dropped by the stand to chat with staff and visitors.

A couple of comments from our stand staff were: “The survey of challenges was really helpful for starting conversations and engaging people.” “The survey was a great idea.”

Over the three days of the event at Olympia, we spoke to civil servants from a wide range of organisations, and gave out approximately 620 pieces of NAO literature.

After the event we emailed the people who had given us their details, with an opportunity to sign up to our new NAO Direct service. This is a service which sets up automatic email alerts to let you know when new information appears on our website or Twitter feed.

To try it out for yourself, go to the NAO home page at www.nao.org.uk and scroll down to sign up under ‘NAOdirect email alerts’.

What is the biggest challenge facing your organisation?

A. Controlling costs

B. Redesigning public services

C. Delivering business as usual

D. Motivating staff

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Letter of the law

It was November 2009 and how, I wondered, would I fill my time after leaving the NAO, after 30 years of full time work apart from three months’ maternity leave? I had plenty of carer responsibilities and a little advisory work lined up but I knew that there was only so much domesticity I could take. I concluded that I should apply to be a magistrate (a Justice in the local parlance). I liked the idea of doing something locally and, once again, belonging to a respected organisation that would help me develop.

Magistrates are unpaid and work as a panel of three. There is a Chair and two ‘wingers’. All are equal in the decision-making but only the Chair speaks. District Judges do the same work as magistrates but are professionally qualified, paid and sit alone. For reasons that I am sure are obvious to NAO people, the latter took the brunt of the extra work following the widespread looting this summer.

It is feasible to be a magistrate when working. My interest in it came from working with a long gone Audit Manager who was (and still is) a magistrate. The NAO allowed him some paid time off to meet his minimum of 13 days and I think he used some of his leave.

APPLYING FOR THE JOBI was attracted to doing it when at the NAO, but only felt able to take it on after I left. I had done my research and knew getting appointed would be a long drawn-out process (it took over a year in my case). Before you can even put an application in you have to sit through a few court sessions and, if interviewed, be prepared to explain what you made of them.

My local court had vacancies so I persuaded a friend with time on her hands to apply as well. We spent a few gloomy November days in Camberwell Magistrates Court listening, learning and speculating – much as I do now when in Court. It was mysterious and fascinating.

By December 2009, my application was in. Little did I know how much effort this would lead to for my three referees. Quite a demanding form apparently!

I went through two very challenging, but surprisingly enjoyable interviews over the next five months. “Give us an example of one of your prejudices” stumped me a little but after some thought I gamely managed to produce “North Londoners”. My interviewers were from South London so that went down ok. (I think they thought I was joking.)

THE RESULTSeptember 2010 – after my application had been through two mediation meetings, just in case the Lord Chancellor was minded to appoint me, I had to undergo a CRB check. Mine came back very quickly – my friend’s took months. And all applications were being processed as a batch.

Mid-January 2011 – joy of joy – I was in. And in contrast to the stately pace thus far, the swearing in ceremony was set for a couple of weeks later. I did the training in February, then three formal observations with a mentor later, finally, my first sitting as a magistrate was in May 2011.

Summer 2011 – How I wondered was I going to fit in the many and various things I was doing? (I had no difficulty, it turned out, in filling in my time after leaving the NAO in the year waiting to become a magistrate.) One thing for sure though – being a magistrate is not one of the activities at risk. I sit about once a week. It is interesting, absorbing, worthwhile and, above all, my fellow Justices are great. Some of them even match up to my ex-colleagues at the NAO.

Patricia Leahy was a director at the NAO and retired in 2009. Not one to rest on her laurels she looked for a new challenge by becoming a local magistrate.

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Dizzy heights

On 2nd October I will be boarding a plane: destination Tanzania. Along with 18 others, I will be attempting to climb the 19,340 ft Mount Kilimanjaro for Caring Matters Now, a charity set up by my friend. Jodi was born with a rare skin condition – Congenital Melanocytic Naevus. Aged 18, she set up Caring Matters Now to raise funding for medical research and to offer support to over 200 families in the UK. I met Jodi at university over 10 years ago and she continues to be one of the most inspirational people I have ever met.

We’re doing an 8 day climb; 6 days to reach the summit and 2 days to descend. 8 days of camping and baby wipe showers await, and a mere 15 hour climb on the sixth day in freezing conditions to reach the summit.

Knowing the challenge that lay ahead, I signed up to the gym in a bid to lose the Christmas pounds and gave up the fags. I know Chris Moyles got up there and he’s a smoker but I’m not taking any chances. Other than a twisted ankle and the subsequent trips to the osteopath, the training is going well. I have 15 more gym sessions to go, and yes, I am counting them down!

I met most of my fellow trekkers a few months ago when climbing Snowdon. It pelted with rain from the moment we set off until the moment we came back – torrential rain that slaps you in the face, and so windy I thought we might get blown off the summit. But even the rain couldn’t dampen our mood and we returned even more determined. We’re meeting up soon to go to Liverpool’s altitude chamber, where they’ll stick heart monitors on us and make us exercise in 4500m conditions. Gulp.

Having been to altitude previously, admittedly having driven there, I know only too well the symptoms of Acute Mountain Sickness – the terrible nausea, the difficulty breathing and the debilitating headaches. So yes, I’m going in to this with my eyes wide open.

With the help of family, friends and colleagues I’ve raised over £2,500 for Caring Matters Now. I’ve been blown away by people’s kindness, generosity and their words of encouragement.

I’ve had my jabs, I’ve got my visa, September’s pay cheque is on a direct debit to Cotswold Outdoors, and I’m as excited as a kid in a sweet shop. Seeing the sun rise from the top of the world’s highest free-standing mountain will be worth all the hard work. Wish me luck, I’m going to need it!

Kirsten Payne as she will look in Tanzania

As InTouch went to press, our plucky colleague Kirsten Payne was in the process of scaling Mount Kilimanjaro in aid of the charity Caring Matters Now.Here is what she told us about this incredible adventure before she set off…

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On the unusually fine sunny evening of 28 September we held our annual alumni event at the smart Buckingham Palace Road offices. It did beg the question, why is it being held in a basement on such a lovely evening? But in our defence – we weren’t to know the freak sunshine would make it 82 degrees in the shade!

However, a warm welcome helped by some summery background music formed a relaxing and upbeat atmosphere. The evening began with a drinks reception which provided an opportunity for alumni members to mingle with each other and current NAO staff.

Our very own Amyas Morse, C&AG, opened the evening with an introduction providing guests with an insight into the NAO achievements over the past year. Amyas then introduced our guest speaker Robin Ryde, a former employee of the NAO.

Robin took the floor and gave a motivating and inspirational talk highlighting his achievements at the NAO, in particular going down memory lane by recalling his time as Development and Talent Director.

Since leaving the NAO, he has embarked on an interesting career journey which has brought various challenges. Robin is now an independent consultant and is the Academic Director of Australia’s largest senior public service leadership programme, the Executive Fellows Program. He has many other strings to his bow, not least being the youngest person to direct the British Prime Minister’s flagship leadership development programme, one of the largest programmes of its kind in Europe.

Robin is also author of the ground-breaking books Thought Leadership: Moving Hearts and Minds and Custom-Built Leadership both published through Palgrave MacMillan, and is currently working on his third book The Death of Deference – so don’t forget to buy one!

Robin did not fail to impress his audience; with his engaging charisma and his humorous jokes!

Finally, Marcial Boo, Director of Strategy, Knowledge and Communications encouraged guests to have a bite to eat and enjoy the rest of the evening whilst presenting them with an opportunity to put forward their ideas for future events. Later that evening, the Alumni Committee picked the best idea and awarded a luxury box of chocolates and a bottle of Merlot to the lucky winners Diane Makepeace and Simon Tang.

Lights camera…action

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Day in the life of an internBy Tim Rogers, Shiban Patel, Daniel Jennison and Xan Gallagher

The NAO has been running a summer internship scheme for the last six years. As a key part of our Diversity Strategy, we work alongside Windsor Fellowship and Employability to recruit eight interns who are provided with the opportunity to spend the summer working alongside audit teams. At the end of the period the interns have not only gained valuable work experience, but an insight into working at the NAO, with the aim that they will apply for our Graduate Scheme. Straight from the off, the interns were introduced to the enthusiasm, commitment and drive that the National Audit Office employees demonstrate – at the pop quiz. The theme was Monopoly and each team had to dress up as something related to their allocated Monopoly property.

The six of us turned up dressed as the Beatles, thinking we had been allocated ‘Liverpool Street’. Much to our surprise, HR had cunningly sabotaged our fancy-dress as we found out we were actually ‘Pentonville Road’ – they still claim to this day that it was only a “mix up”!

Luckily for us, we had already considered the relevance between Pentonville Road and the Beatles… Club 2711 (located at 96-98 Pentonville Road) play some of their music! So things could only get better from here on in, and we were confident we would go all the way in the quiz! We came last.

We have also managed to do some work while we have been here, all VFM because the financial audit season had ended.

Tim was placed in the Banking & Capital Markets team, looking at the government support schemes provided to the banks. In this role he assisted with the production of the Report on HM Treasury’s Accounts: The Financial Stability Interventions. He also managed to help out the Private Finance Team (PFI), on a PFI equity study, and a cross-government study looking at improving the efficiency of the central government office estate, assisting with a couple of interviews.

Shiban was allocated to the Defra team, reporting on Flood and Coastal Risk Management. Joining halfway through the fieldwork stage, this was a great opportunity to attend several client interviews and meetings in order to acquire first hand exposure to government departments and agencies. This included the Environment Agency, who play a central role in this field. He was also able to attend a proof of concept meeting with the C&AG, which is regarded as a critical stage in the process, and this gave him further insight into VFM.

Unfortunately, before Dan could start his internship, he had an operation that left him somewhat immobile! However, the NAO managed to hire a wheelchair and Dan was placed within the Transport team. He was given a variety of work including observing Select Committee meetings, attending meetings with departments and being briefed by experienced members of the team.

Xan was allocated to Regulation, compiling a VFM report on Reducing Bureaucracy in Further Education.

Joining at the tail end of the fieldwork Xan was able to go on client visits and witness the transition into the drafting of the final report. This allowed him to visit the Department for Education and a FE college, where he was able to assess the burdens that these colleges faced. He was given an opportunity to compile his own report on the college.

We were all given various training sessions including: Financial Audit Training; Government Framework Training; Introduction to the Essentials of VFM; Perspectives on Accountability, where Henry Midgley told us everything we need to know about history; and attended the event Civil Service Live. From the eight-week internship, we have learnt about the operations of the National Audit Office and how government works. It has also led Michael, one of the other interns, to set a new personal goal for himself – becoming the C&AG of Ghana one day!

We wish all the people at the NAO the very best and hope to see them in the future.

In summer 2011, the interns were Georgina Draper, Alexander Gallagher, Daniel Jennison, Michael Lartey-Maurer, Shiban Patel and Timothy Rogers.

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Sarah Farndale finds that charity begins at homeless centres

HELPING HANDS

Comptroller and Auditor General Amyas Morse on washing up duty.

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3,673 people lived homeless on the streets of London in 2009-10 (reportedly a rise of 20 per cent over two years). Some NAO staff are going beyond giving loose change or buying the Big Issue, and have been pulling up their shirtsleeves to help the homeless.

Thirty new volunteers have signed up to help out at The Passage homeless centre near Victoria Station. The new volunteers do breakfast or lunch duty and could find themselves washing up, peeling and chopping vegetables or serving toast and coffee. Terry Caulfield, Audit Principal, chopped peppers and onions for two and half hours in his first session (and he is going back for more!). Terry was drawn to volunteer at The Passage because it is accessible and different. “I have volunteered for the primary school reading programme before and I wanted to do something a bit different too”. Danielle Williams, another Audit Principal, felt very aware of the problem of homelessness in the area around the office “you see people on the streets a lot around Victoria and I was very conscious of the problem, so I wanted to do something to try and help.” Bridget Jackson, Audit Manager, agrees: “I wanted to break down the barrier between me and those that have had far fewer chances in life. Getting involved with The Passage does this. I wanted to do more than just feel sorry for homeless people when I pass them on the street.” The volunteers also commented on how most of us are lucky to have some flexibility in our work, which means that we can volunteer every once in while. It certainly shows more of a commitment to help than a direct debit out of an account, as Terry mentions “it’s a different sort of commitment.”

And the volunteering spirit is being led from the top, with the C&AG Amyas Morse kicking off the first session. “I didn’t do this as part of some kind of corporate social responsibility agenda,” Amyas commented, “I was initially impressed that a group of staff were willing to give up their time to volunteer. The work that the volunteers do is both good for them as individuals and is, of course, of great value to the charity.” Amyas was put on washing up duty to start with, which

apparently is just like at home, where his wife cooks and he washes up! So why did he volunteer? “I hoped that I could be of some help and I also wanted to encourage other staff to volunteer. It is a tough life out there and a lot of people don’t have the prospects that we do. I think this is a great thing for people to do because it gives you a real sense of perspective about life. But it also made me think ‘there but for fortune’; in that I don’t feel that different from these people, it is often just bad luck that means people end up in these awful circumstances.”

Hands on deckEmma Long, volunteer coordinator at The Passage, is really pleased with the NAO’s contribution. “We provide breakfast and lunch every single day of the year for 150 to 200 clients across our day centre and two residential

centres and so we need as many hands on deck as we can get. It’s also great to have a firm undertaking from a company, with staff who are willing to make a regular commitment and volunteers that we can rely on. We also think it is important that more and more people understand the complexity of the issues around homelessness and perhaps can start to change attitudes, so that homeless people are treated with the dignity and respect that they deserve.”

Tough Times The work of The Passage may become even more important if Westminster Council’s proposed bye-law, which it is currently consulting on, to prevent rough sleeping and soup-runs in Victoria goes through. So, if you’d like to find out more or volunteer, please do email us at sarah.threapleton@nao.gsi.gov.uk

I hoped that I could be of some help and I also wanted to encourage other staff to volunteer. It is a tough life out there and a lot of people don’t have the prospects that we do

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By Simon Banner

Secondment to none

For someone used to VFM audit, I initially found the need to draw extensively upon my long-forgotten accountancy knowledge a shock to the system

Since I joined the NAO several (ahem) years ago, I have spent much of my time auditing regulators, so when an advertisement appeared on Merlin for a secondment to Monitor (the Independent Regulator of NHS Foundation Trusts) I thought it was an ideal opportunity for me to learn about what regulators do which would in future allow me to preach what I had practised, so to speak.

NHS foundation trusts are given a degree of independence from the rest of the NHS with the intention that local decisions are made about how best to deliver and improve patient service, including greater freedom to borrow and invest in new patient care facilities. In return foundation trusts are expected to demonstrate financial security and sound governance.

Monitor currently has two main functions: to assess whether applicant NHS Trusts are ready for Authorisation as a foundation trust (Assessment), and to check the financial health and governance of existing foundation trusts for breaches of the terms of their Authorisation (Compliance). Key principles underlying Monitor’s work are encouraging a culture of openness among trusts, and the importance of picking up on any early warning indicators and evidence that trusts are acting to correct any financial or governance weaknesses before they become more serious. Monitor also seeks to work closely with the Care Quality Commission, which is responsible for regulating clinical quality at trusts.

Monitor’s compliance function is organised into teams, each responsible for a portfolio of trusts. For me, as a Compliance Manager, in practical terms this has meant reviewing the annual plans submitted by each trust in a portfolio, focusing on the quality of the plan and identifying any risks which might stem from it – in particular, responding to the current climate, whether trusts had considered in sufficient detail the potential impact of their efficiency saving proposals on clinical quality. It also means reviewing the return submitted by each trust every quarter showing its financial performance against plan and its performance against a range of clinical targets and indicators.

These are interesting and uncertain times for Monitor – the debate around the future of the NHS (and the role of Monitor) shows no sign of abating. The initial plans for Monitor to lose its compliance role and instead become an economic regulator of the market (in some ways similar to Ofgem in the energy sector) were stopped following publication of the Future Forum report. Even within its existing roles, structural changes in the sector (for example, the Government’s intention that all trusts acquire foundation status by 2014), and increasing pressures on trusts to find greater efficiency savings and remain financially stable, will present Monitor with new regulatory challenges. Monitor also has to deal with trusts who are responding to unforeseen and at times serious events – for example, the investigation that began this summer into contamination of medical products at Stockport NHS foundation trust.

A friend at the NAO said to me recently, “everyone seems to work harder when they go on secondment” – but don’t let that put you off! There is often a steep learning curve working in a new sector and becoming familiar with new working practices and terminology. For someone used to VFM audit, I initially found the need to draw extensively upon my long-forgotten accountancy knowledge a shock to the system. The profile of work – sharp peaks around key milestones for quarterly and annual reporting – is closer to that found in a Financial Audit work timetable than (shall we say) the flatter profile of VFM work. Fortunately, adjusting to this pattern is made easier by the friendly and collaborative way of working among Monitor staff.

Based on my experience, I would highly recommend going on secondment for widening your perspective – by putting yourself in the shoes of the people that you are auditing, rapidly learning new skills and refreshing old ones, meeting new people and experiencing different ways of working. As a bonus, I’m probably healthier as a result of working at Monitor due to the fruit provided free to staff – maybe an idea for the NAO to adopt?

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Recent VFM reports

The failure of the FiReControl projectHC 1272 2010-2012The project to replace the 46 Fire and Rescue Service’s local control rooms across England with nine purpose-built regional control centres linked by a new IT system has been a comprehensive failure. The Department for Communities and Local Government acted to cut its losses by terminating the contract in December 2010, seven years after it had begun, but at least £469 million will have been wasted, with no IT system delivered and eight of the nine new regional control centres remaining empty and costly to maintain.

The Department took a firmer grip of the project from 2009 and terminated the contract in December 2010 to avoid even more money being wasted. The Department is now trying to minimise the future cost of the project by subsidising Fire and Rescue Services to use the Regional Control Centres.

Independent Parliamentary Standards Authority: the payment of MPs’ expensesHC 1273 2010-2012The new scheme for paying MPs’ allowances and expenses, introduced by the Independent Parliamentary Standards Authority (IPSA), was set up with commendable speed, is safeguarding public money and is making a significant contribution to increasing public confidence. However, IPSA did not have enough regard to the effect of the scheme on the ability of MPs to fulfil their duties, nor to the costs falling upon them during its first year of operations.

IPSA has reviewed its scheme in the first year and made a number of improvements to reduce the burden on MPs. However, the NAO recommends that IPSA should work with MPs and the House authorities to develop a strategy to address the amount of time MPs and their staff have to spend interacting with the scheme and the laborious nature of certain elements of the claims process. Given that the number of claims rejected is low and that there is no systematic abuse of the Scheme, IPSA should focus its validation effort on areas of risk in order to improve efficiency.

Reducing costs in the Department for Work and PensionsHC 1089 2010-2012The Department for Work and Pensions will have to make rapid progress in reorganising the way it operates if it is to meet its target of achieving sustainable running cost reductions of £2.7 billion while implementing substantial welfare reforms and a £17 billion reduction in benefits and pensions by 2014-15, according to the NAO. The Department has the largest annual expenditure of any central government department and so its cost reductions will be central to the Government’s meeting its priority objective of reducing the budget deficit.

The report recognises that the DWP is only at the start of its new cost reduction challenge. However, without basing its running cost reduction plans more on robust information on the profile of its business costs and how that relates to the value of the services delivered, the Department is not in the position to make rational choices about what it should stop doing, what it should change and what it should continue. Recent cost reductions have been based largely on budget restrictions rather than on fundamental reform of working practices.

PaceSetter: HMRC’s programme to improve business operationsHC 1280 2010-2012HM Revenue & Customs’ PaceSetter Programme, aimed at streamlining business operations, have improved productivity through new ways of working and may have contributed to greater staff engagement. However, it concludes that the Programme is not yet delivering value for money because the extent to which efficiency has improved was not clear; and some key principles of process improvement have not been applied strategically across the entire organisation and embedded into the Department’s core processes.

The NAO recommends that to maximise the benefits of PaceSetter, the Department needs to use the Programme to help it streamline its business operations in a more strategic way, based on a clear understanding of processes in their entirety and of what its customers require.

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Each year the Research Councils invest around £3 billion in research covering the full spectrum of academic disciplines, from the medical and biological sciences to astronomy, physics, chemistry and engineering, social sciences, economics, environmental sciences and the arts and humanities. They achieve this by nurturing high quality research with a variety of funding approaches, helping establish international collaborations and providing access to large scientific facilities and infrastructure.

There are seven Councils and over the last few years they have been developing a shared service centre (SSC) to perform all back room functions in one place. To develop such a centre, from a base of seven very different Councils, with

different needs, systems and processes has been challenging. There have inevitably been teething problems, resulting in no Council meeting the pre-recess timetable. The Internal Audit Department (RCIAS) at the Councils has been heavily involved in helping the SSC to review its controls and procedures.

Mutually beneficial I have been auditing the Councils for a number of years and developed a good relationship with the Director of Internal Audit. It struck me that we might be able to help out the RCIAS by offering a mini-secondment to NAO trainees. In helping the RCIAS, there might also be benefits for the NAO, by helping to develop our trainees. The NAO was bringing the five contracted out Council

audits back in-house and was carrying out a VfM report on the SSC. By placing a trainee in the SSC environment it would give us an opportunity to develop a more detailed understanding of how the Councils and SSC interact, the issues staff face on a daily basis and, perhaps less visible to external auditors, a view of how the problems faced were impacting on staff morale. It would also strengthen our understanding of how the RCIAS works and the issues it faces, as well as build a more solid relationship with NAO across the RCIAS grades. This would bode well for the future as we seek to rely on their work once the internal control environment operating in the Councils becomes more stable.

A mini secondment from the NAO to the Internal Audit Department of the Research Councils has come about

A TRIP TO THE OTHER SIDE

Steve Mirfin explains the origins

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Test-case With these ideas in mind I contacted Human Resources and Anne Graham, an NAO alumnus working as Manager for Development and Training at RCIAS, and I developed a plan to get the idea up and running.

At the same time, HR and Training were having separate discussions on the potential use of mini secondments to improve our knowledge of our clients and to gain a better understanding of the client perspective, with a view to informing our work. The Research Councils became our test client and Leanne Miller very bravely stepped in to the role of secondee.

Leanne Miller describes her experience of life as an internal auditor

I came away with a much better understanding of internal controls, which will benefit my audit work

I spent four weeks with RCIAS. The secondment was split in half – for the first two weeks I worked as a regular member of the RCIAS team, working on two different internal audit reports about the SSC. I attended client meetings with SSC staff, updated system notes, carried out transaction testing, and helped put together a hard file of audit evidence. The second half of the secondment also involved some audit work, but was more geared towards gathering knowledge about the client on behalf of the NAO. RCIAS arranged several meetings for me, with representatives from different Research Councils. I talked to them about their work, the NAO, internal and external audit and the challenges they are currently facing.

Skills developmentBefore starting the placement, I worked with Steve and Nikki to set out some objectives. Some were organisational – e.g. to gain an insight into the challenges and issues facing the Research Councils and the SSC and their potential impact on the work of the NAO – others were for my own personal development.

In this respect the scheme was a fantastic opportunity for me to develop a wide range of professional skills. These include team working, learning about internal audit, improving interpersonal skills and gaining experience of leading meetings with senior staff. I integrated into a new team, having to adapt quickly to their working practices.

I came away with a much better understanding of internal controls, which will benefit my audit work, and I vastly improved my knowledge and understanding of internal audit, particularly the link between their work and ours.

As well as this, I was privileged to be able to represent the NAO, fielding questions about the work we do and hopefully showing the client staff that we are not as scary as we may seem!

The future of the schemeI hope my secondment can go a small way to enhancing the productivity of our working relationship with RCIAS and the Research Councils. We were able to discuss the ways in which we can work better together, having the time to do this in a more relaxed way, without the constraints of actually trying to complete an audit. This was a fantastic opportunity; not only was it a great development opportunity for me, but I believe it was also beneficial for both the host organisation and the NAO.

When I came back from my secondment I gave a presentation to NAO staff from both the SSC VFM study and the financial audits of the Councils. Hopefully, I was able to give an insight into the problems experienced by staff at ground level as well as an indication of the ways in which the SSC and Councils were trying to develop their working relationships in order to make the SSC a success.

14 | INTOUCH

IS THE NAO

DIFFERENT?Sir Andrew Likierman discusses the foibles of the NAO board from a non-executive point of view

INTOUCH | 15

The public sector has the advantage, certainly for non-executive directors, of governance mechanisms that make relationships more formal and structured

Of course it’s different – all boards are different because, as with any group meeting together, we are a combination of a particular set of people with qualities and, yes, quirks.

Moving swiftly from what those quirks might be, on a formal basis, the NAO Board has a number of elements which make it different to any other private or public sector organisation. These elements are our particular combination of stakeholders and the nature of our accountability to Parliament. We are different to all but a few public sector bodies in having limits in what we cover as a board (reflecting the C&AG’s special position) and the fact that the executive head of the organisation is not appointed by the board.

Yet in practice, much of what we actually do is very similar to other boards. And I believe that, as with other non-executives, we help by bringing an outside set of experiences and perspectives. So here are my own reflections on some of those similarities and differences in practice from the perspective of having been on the Boards of about a dozen other organisations, mostly as a non-executive.

Issues covered Boards of whatever kind need to address similar issues. These include setting the strategy, assessing risks, making sure the financials are sound and people issues, including succession. At Barclays, where I am a non-executive director, the management of risk is always central, while at the market research firm MORI, where I was non-executive chair, the people issues were dominant. At the NAO there is the opportunity to make a particular contribution on the non-statutory work. For any organisation, however, the emphasis will also vary over time and at the NAO, we define our objectives each year.

Relationships with colleagues This is important to all boards, though it’s often more prominent to the working of the board in the private than in the public sector, even more so where the founder or founding family are represented. I say that having been involved in three different private sector companies dominated by the founders. In each case, though in different ways, the founders did not always find it easy to be less hands-on once outsiders became involved. The public sector has the advantage, certainly for non-executive directors, of governance mechanisms that make relationships more formal and structured.

Expectations This is an issue in terms of what the rest of the organisation expects as well as what the individuals expect from each other. This applies particularly to newly-formed boards, as for the NAO under the new arrangements in the summer of 2009.

One of the characteristics of a good board is that the expectations of the individuals round the board table are aligned. Regular board reviews can play a key role in this. Until ten years ago these were rare and, combined with a reticence about suggesting how performance could be improved, I believe that board performance suffered. The new NAO Board did an internal appraisal after a year and is doing another after two. In the third year there will be an outside appraisal as a useful check. At Barclays we have an outside firm doing an appraisal every year, which is even better than one year in three, but it is expensive.

Responsibilities As I noted above, the NAO Board has certain elements on appointment and responsibility that make it different to other boards. The Bank of England, where I served as a non-executive, has similarly unusual arrangements in that the Chief Executive – the Governor – is not appointed by the Board. There is also a similarity to the Bank of England in that there are certain areas – the decisions of the Monetary Policy Committee on the setting of interest rates – over which the board had no responsibility. Exposure to these arrangements has been very useful for the NAO Board in understanding how we can operate effectively.

Stakeholder relationships One of the roles of boards is to help in balancing the requirements of different stakeholders. This also applies to the NAO Board, though for the reasons already given, the scope is different to more conventional organisations. There is also the process unique to the NAO of submitting its strategy to the Public Accounts Commission each autumn and then reporting on how it has been delivered the following autumn.

In some respects managing the relationship with stakeholders is easier in the private sector than the public. In the private sector, stakeholder rights are unambiguous, while in the public sector, the relationships are more formal but can be ambiguous in practice. However, even in the private sector, matters are not always straightforward. As non-executive Chairman of the Economists’ Bookshop group, there were only two shareholders, but they didn’t always agree on policy. This left the board with a potentially undeliverable remit and a tough task for the Chairman.

Change over time In very few organisations can the board simply carry on what it’s doing without making sure it is adapting to changing needs and requirements. This applies to both public and private sector boards. In the Treasury, our departmental board was a meeting of senior managers when I arrived. By the time I left, we brought in non-executives before they were required. I was on the Audit Commission Board 20 years ago, and there too, while I was on it, the Commission changed the way it worked in response to changing needs. At the Bank of England, the role of the board was changed by external events – the financial crisis in 2007. At the NAO, we on the Board want to learn from experience and from others, anticipating change rather than being pushed by it.

Visibility Non-executives are usually said to be remote from the business and to lack visibility. Achieving a balance between being visible while not interfering is always difficult, in the NAO as everywhere else. We are aware of this and are doing more to see how we can engage.

All of us on the NAO Board, executives and non-executives alike, are determined to make sure that it provides a strong contribution to the working and reputation of the NAO.

What have you been doing since leaving the NAO?

After 33 years I had hoped to be able to say I would be taking it a bit easier but with my middle child at University and one still at school that’s not an option. And for those who know me I doubt that that would come as a surprise! Having had the privilege of conducting value for money investigations of the NHS and wider health and social care sector for the last 13 years my ambition and my passions are intrinsically linked with trying to do something to continue to help improve these services. I have therefore become a Non-Executive of an NHS acute hospital where I also Chair the Board’s Quality and Safety Committee. I am also doing a project for Marie Curie on Mapping End of Life Care needs and have written some Ministerial Briefings on Improving Diagnostic Services for a private sector company who want to draw attention to this important issue. But it’s certainly not all work and no play, as in the last seven months I have managed holidays to the French Alps, Dubai, Koh Samui and Tuscany – and am working on my golf swing, so I definitely have more of a work/life balance.

What do you miss most about the NAO?

Without question the people, over the years I have worked with some amazing people and for the last 13 years enjoyed working with some truly excellent teams of dedicated, clever, wise and wonderful individuals who seemed always prepared to go the extra mile. We worked hard and played hard and our reports have certainly helped change services for the better. I also miss the unique insight that you get from working so closely with Parliament and policymakers.

What do you not miss?

The time spent in endless meetings or the 10,000 word limit (although I agree that it makes for more hard hitting and easy to read reports and I surprise myself with how much that has helped me be a more concise drafter!) and dodging the tourists dragging their suitcases along without any thought for others.

What is your fondest memory during your time at the NAO?

Far too many to mention but if pressed it would probably be Audacity and the Office Christmas revue ( yes I have been around a long time) with Wynn Bass’s rendition of the deck of card where the four AAGs at the time were the 4 aces – priceless! And for me personally, four weeks spent in Kenya running a Value for Money training course and getting to go on Safari and to the beach at the weekends and a second training course to China, just as it was starting to really open up – including the opening of the first MacDonald’s in Beijing! Then there was the recognition from the previous Chair of PAC when he referred to the health teams work on HCAI, stroke, dementia and end of life care, which he identified as reports he was proud to have been involved with and which he believed had made a difference.

What one thing would you have changed about the NAO?

The trust and belief of senior management in the people the NAO employ and recognition that they are truly professionals, good at what they do, and better value for money than many external consultants.

What is your prediction for the future of the NAO?

It can and should go from strength to strength, the downturn in the economy and the increasing emphasis on the need to demonstrate more efficient and effective ways of working, and that the taxpayer is getting true value for money, provides an excellent opportunity for the NAO to consolidate its position as the expert commentator on these issues. But it also needs to assess how it goes about demonstrating this to Parliament and the public and in ensuring that the evidence of financial impact on the ground is rigorous. It will also be much easier to avoid being confused with the Audit Commission!

Q&AKaren TaylorFormer Director of Health VFM

We worked hard and played hard and our reports have certainly helped change services for the better