Governance Systems Review
The checks and balances within a Department designed to catch problems early failed over many years in DETI to identify certain of the risks of the RHI or their materialisation. All Departments would benefit from reviewing how their governance systems work in practice in order to ensure that they are widely understood and actively used by staff. Leaders should set the tone and expectation for strong governance and risk management.
- The NIAO Second Progress Report (October 2024) assessed this recommendation as "Unlikely to be Fully Implemented", noting that despite updated Orange Book risk guidance and references to Governance Statements, NIAO found no evidence that departments had systematically reviewed how their governance systems work in practice as envisaged by the recommendation (NIAO Second Progress Report, October 2024).
How was this evidence gathered?
Response
Accepted
Response
Accepted[Note: The NI Executive responded to recommendations 19-23, 29-33 together as a group under the 'Governance and Financial Controls' theme.] NI Executive Response (October 2021): These recommendations can be accepted in full. It is important to note that public expenditure in NI is governed by the UK Budgeting rules set by HM Treasury. These rules mean that there is limited flexibility available to the Executive in some areas. Some elements are addressed in existing guidance, including the stipulation that resources should be utilised in line with regularity, propriety and value for money considerations. Funding for some specific issues may be provided by HMT on a time-limited basis. In addition the HMT public expenditure rules mean that only very limited funding can be carried forward between financial years. However, this does not override the value for money requirement. Departments have the opportunity to revise annual budget allocations through the in-year process. Value for Money is already a requirement in the NICS core competency framework. These recommendations have been addressed in work to date through: Departments' response to the lessons learned following PWC's Heat Reports; the major and fundamental Review of the Expenditure Approval and Business Case Processes, incorporating many of the recommended elements; the delivery of an online package of Public Expenditure training for both budget holders and general-service grades; the initiation of a review of MPMNI; re-establishment of DoF-led Finance Director meetings; the issue of a formal protocol for engagement with HMT. Further work is required to: give consideration to the role of Casework Committees to ensure that they are rigorous and deliver the necessary scrutiny and independence, in line with the existing role of Gateway reviews; Implementation of Five Case Model guidance; Engagement with the Treasury around 'false economies'; Consideration by DoF of the introduction of an Approval Panel for the highest cost and most complex proposals.
Progress Timeline
NIAO Second Progress Report (October 2024): Unlikely to be Fully Implemented. Despite updated Orange Book risk guidance and references to Governance Statements, NIAO finds no evidence that departments have reviewed how their governance systems work in practice or that staff actively understand and use them. No specific action has been taken to address the core of this recommendation.
Published Evidence
Published assessments of progress from inspectorates, select committees, official progress reports, and other sources. Source type badge indicates whether each assessment is independent or government self-reported.
NIAO found departments had not sufficiently improved governance systems and procedures. Formal reviews done but practical impact limited.
View detailed findings
While governance frameworks and risk management processes have been formally reviewed across departments, the NIAO noted insufficient improvement in how governance systems work in practice. The gap between formal processes and actual behaviour remains the core problem.