“No real changes made” 12 months after damning report on States spending

Thursday 06 August 2015

A year after a damning report showed that the States were failing on basic financial management standards, a follow-up has found that almost no improvements have been made.

The 2014 report by the States spending watchdog highlighted failures in the way that the Treasury department’s rules on spending were communicated, followed and monitored.

At the time, the report was accepted by then-Treasury Minister Philip Ozouf who agreed all 13 recommendations.

But when the Public Accounts Committee came back to check on progress a year later, they found that very little had happened – and that the process of sorting out the problems has not got going.

PAC Chairman Andrew Lewis said that the rules encouraged “old-school” public sector thinking and spending, and said that the failure to deal with the problems with spending rules were unacceptable.

And he added that the old rules had allowed, for example, the Port Galots project to drift while the budget approved by the States was slowly burned up by departments.

He said: “Financial Directions are overly complex, full of tick-boxes and they do little to encourage the kind of innovative financial thinking the States need to get our finances back on track.

“They hard-wire the old public sector approach to spending. We also know from the C&AG’s work last year that there are some compliance issues to resolve, not least in terms of States’ spending on travel and consultants.

“The rulebook needs rewriting, and quickly. It is frankly unacceptable that PAC is having to report such limited progress on the implementation of recommendations made by the C&AG one year ago and which were almost entirely accepted by the then Minister for Treasury and Resources.”