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Ex-employees being paid at higher rates when they were employees, recurring risks of fraud, and a bill of nearly £900m spent on contracts that did not follow a proper process... A new watchdog report has raised serious concerns about Government methods when it comes to recruiting advisers and suppliers.
Published today, Comptroller and Auditor General Lynn Pamment's latest review was only due to examine the Government's use of consultants, but uncovered various other areas of concern.
It found that:
the Government spent over £881million on contracts that did not go through the proper procurement process over a three-and-a-half year period;
some of the contractors being used by Government are "ex-employees paid at higher rates than when they were employees”;
many consultants are being employed outside of a proper tender process – and the rates being paid to them "far exceed the cost of employing substantive project managers" – with one role costing the Government more than £300,000 annually, including expenses; and
information on some procurement activities has been put into the new IT system retrospectively – increasing the "risk of fraud and poor value for money".
It comes after it recently emerged that external consultants cost the taxpayer nearly £60 million during Kristina Moore’s time as Chief Minister.
The publication of these figures was delayed by over a year – with Express being told previously that this was down to issues with the new IT and finance system.
Pictured: External consultants cost the taxpayer nearly £60 million during Kristina Moore’s time as Chief Minister.
The C&AG noted that “the reporting of consultant and contingent labour spend to the States Assembly has fallen behind”.
“The most recent report, published in February 2024, was for the period July to December 2022, with the previous report for January to June 2022 published in February 2023,” the report said.
In the most recently published report, the Government said it was unable to provide the required procurement information for consultants as it did not maintain a central record of how external consultants were selected.
When roles are not procured through a tender process, they are deemed a procurement exemption or breach.
A procurement exemption is the formal process for requesting a deviation from the standard sourcing route which usually sought in exceptional circumstances.
A breach occurs when expenditure has already been committed to but no exemption has been approved.
The CAG found that – across all procurements, not just the procurement of consultants – the total value of all procurement breaches and exemptions from 1 January 2020 to 31 July 2023 totalled over £881 million.
“The average number of breaches and exemptions each month is around 30, but in the late months of 2022 and early months of 2023 this rose to more than 60 in most months,” the report said.
Video: Watchdog Lynn Pamment discussing the findings of the report.
It also emerged during the set-up of the new IT finance system at the start of last year that there had been instances where goods and services hadn't been procured from suppliers using the right system procedure.
As a result, some suppliers had to be set up on the new system retrospectively in order to be paid – in one six-week period, there were 65 such instances in a single department.
The watchdog said this represented "a significant weakness in governance and increases the risk of fraud and poor value for money".
Ms Pamment found some “significant individual sums” included in the breaches and exemptions report.
“I have identified instances where procurement exemptions have been approved for the use of consultants and contingent labour with what I consider to be insufficient evidence to support an exemption,” she added.
Pictured: The Comptroller and Auditor General, Lynn Pamment found some “significant individual sums” included in the breaches and exemptions report.
Although the breaches and exemptions report is supposed to be a standing item on the Public Finance Manual Management Group for review, the CAG found that “this report has not been going to the Group on a consistent or regular basis”.
“The role of Departmental Finance Business Partners in identifying and challenging proposed procurement breaches and exemption requests is not clear,” the watchdog found.
“In addition, the breaches and exemptions report is not currently provided to the Government Risk and Audit Committee nor the Non-Ministerial Departments Audit Committee for review.”
Ms Pamment also identified examples where consultants had been commissioned internally and then had their contracts extended with review or “consideration as to whether alternative methods of delivery would drive greater value for money”.
“As a result of poor contract management, some consultants have been with the Government for significant amounts of time, and at a cost far in excess of the recruitment and payment of a member of staff to undertake the work,” she found.
“Some contracts have simply ‘rolled forward’ with little evidence of challenge and scrutiny and little evidence of value for money being delivered.”
Pictured: “Some contracts have simply ‘rolled forward’ with little evidence of challenge and scrutiny and little evidence of value for money being delivered.”
It also emerged that “some of the contractors being used by Government are ex-employees paid at higher rates than when they were employees”.
Ms Pamment explained: “Some consultants ‘move’ to areas of need across different projects rather than the contract being terminated at the end of a project and a new contract procured for the new project as is required by the Public Finances Manual.”
The CAG also found that the quality of record-keeping for some consultancy projects “was in need of improvement”.
“In some departments, officers took a long time to produce the information I requested and when it was produced it was not always complete,” she said.
“Poor record-keeping is evidence of poor accountability and the absence of contract documents can cause serious problems in the event of a dispute with the contractor.”
Pictured: “Reducing the cost of consultants is a high priority for this Government," said Chief Minister Lyndon Farnham.
Announcing the publication of the report, Ms Pamment said: “…Where consultants are used, there is a need to ensure robust processes are in place to drive value for money.
“My review has identified that such processes are not in place on a consistent basis across the States of Jersey.
“As a consequence, value for money from the use of consultants cannot be demonstrated consistently.”
She added: “The States of Jersey should build on earlier progress by implementing the recommendations in this report to secure better value for money from their use of consultants.”
In response to the publication of the report, Chief Minister Lyndon Farnham said: “We welcome this follow-up review from the C&AG and note the findings and recommendations.
“Reducing the cost of consultants is a high priority for this Government."
He continued: “There will always be certain skills we do not have on island.
"However, where it is necessary to use consultants there is a need for a more robust process to be in place to deliver savings and ensure value for money.”
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