States Mis-managing Grants

7th December 2017
There are ‘significant weaknesses’ in the way Jersey’s States manage grants and subsidies.
The government’s Auditor General has exposed ‘insufficient corporate oversight’ of the way public money is handed out.
The C&AG Karen McConnell has been probing £5 million worth of grants to projects and organisations – just a fraction of what is giving out annually.
They include cash given to run the swimming pool on the Waterfront, put on the 2016 Air Display, and boost visitor numbers through the Tourism Development Fund.
She says there are lots of different types of hand-outs, but no analysis of the different schemes to see just how much publicly-funded support each recipient is getting.
There is also ambiguity about what constitutes a grant – and some are actually ‘contractual payments’.
Karen McConnell has concluded the States is lacking the corporate standards to manage grants effectively, which adds up to not being able to demonstrate value for money.
She has called for tighter financial controls.
“I am concerned that there are weaknesses in the management of grants and that: taken together, the weaknesses are significant and mean that the States are not able to demonstrate that value for money is secured from expenditure on grants; and in some parts of the States a culture was tolerated that allowed such weaknesses to persist, even after Internal Audit made recommendations for improvement. Although these issues have been highlighted within Economic Development, Tourism, Sport and Culture, there is room for improvement in other departments.
“Too often weaknesses in arrangements have been identified but prompt and effective action has not been taken. However, In October 2017, the recently appointed Accounting Officer for Economic Development, Tourism, Sport and Culture wrote to the Treasurer of the States highlighting not only significant issues relating to grant expenditure but also a lack of capacity within the Department to address them. He also outlined the work in place to address the weaknesses in control. I welcome this positive commitment to change.
“I also welcome both the decision to develop a new Financial Direction covering grants, which I understand will be issued shortly, and the focus of Internal Audit on this area. But development of the Financial Direction and reporting by Internal Audit will not be sufficient to enable the States to demonstrate that value for money is consistently being secured from grant expenditure. That will require effective roll-out of new arrangements and implementation of recommendations. Crucially it will also require a consistent understanding of the elements of good practice in the management of grants and a culture of learning so that good practice is shared and consistently applied across the States.”

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