Business Irish

Saturday 21 April 2018

NAMA audit putting huge strain on resources, watchdog warns

Comptroller and Auditor General Seamus McCarthy warns of pressure on staffing resources
Comptroller and Auditor General Seamus McCarthy warns of pressure on staffing resources
Colm Kelpie

Colm Kelpie

THE State's public spending watchdog has warned that auditing the National Asset Management Agency (NAMA) is putting a strain on its resources with staff being pulled from other work.

The office of the Comptroller and Auditor General (C&AG), which has suffered a drop in staff, revealed employees in the audit division were being diverted from support services, other financial audits and reporting work to ensure the bad bank is subject to public accountability.

The office gave a stark assessment of its capabilities in a document sent to the Oireachtas Finance Committee, and seen by the Irish Independent, stating it did not believe its constitutional mandate could be delivered if staff numbers dropped any further.

An average of nine audit staff have been assigned to Nama each year since the bad bank was set up in 2009.

The C&AG's office said the extra workload had affected its ability to carry out other duties. It also warned that the early retirement of senior staff earlier in the year had compounded the difficulties, despite being allowed to fill some of the vacancies.

"Our appointment as auditor of the National Asset Management Agency. . . has placed pressure on resources and in order to undertake this audit, staff were relocated from support services, other financial audits and reporting work," the office wrote.

"The numbers involved in reporting have fallen from 29 in 2009 to around 15 in 2012.

"We have not been in a position to complete any project-value-for-money examinations for a number of years."

The office has produced a number of special reports into the operation of the bad bank, including most recently one focusing on the management of loans published in May and a separate one on the acquisition of bank assets in November 2010.

The C&AG's office has seen its staffing complement fall to 146 full-time equivalents last year compared with 150 in 2010. The office was unable to say how many actual staff it has.

In the document submitted to TDs and senators on the effect of cuts next year, the office said the early retirement of senior staff this year had also contributed to resource pressures despite being allowed to fill some vacancies.

It said it continued to rely on the work of other auditors in the university sector and contracting in temporary staff to fill short-term vacancies.

It warned that if staff numbers drop any further, it would not be able to meet its constitutional mandate.

The office said outsourcing continues to assist in dealing with the workload, but that enhancing it would not result in significant savings.

The last project-value-for-money examination carried out by the C&AG's office was in 2009, when the driver-testing service was looked at. It was published in February 2010.

However, a spokeswoman said it has been producing a lot of reporting work since as part of its annual reports and other smaller, more compacted so-called special reports.

It warned that savings that could be found could be offset by any proposals to restructure the health sector, "which could provide for an increase in the number of accountable bodies in receipt of Exchequer funding".

Meanwhile, the office is also looking to undertake a cold file review, to reassure management that past financial audits have been completed in accordance with auditing standards.

An external company will be appointed and will select 10 financial audit files with 2011 year-ends. The C&AG's office said a similar exercise was carried out in 2010.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business