Source · Select Committees · Public Accounts Committee
Recommendation 3
3
The Department cannot explain the additional benefit it has received from its contract with a...
Conclusion
The Department cannot explain the additional benefit it has received from its contract with a professional services firm to perform due diligence on charity applications to The National Lottery Challenge Fund (TNLCF). TNLCF is an organisation that is experienced in distributing funding, which formed part of the justification by the Department in selecting them as a partner. But the Department paid PwC £2 million for specialist support on data collection, analytical support and due diligence, including checks on all award decisions by TNLCF for the CCSF. TNLCF, however, was confident in the processes it already had in place to conduct these checks and award funding. The Department revised the arrangements after a short amount of time because reviewing awards under £10,000 was overly onerous. The Department asserts that the support from PwC was necessary due to the fast paced and pressured environment it was operating in but has no evidence of the added value it received from these additional checks. While the Department has been focussed on distributing money as quickly as possible, its objective has also been to distribute it in the right way and prevent fraud. The Department has to date identified fraud valued at £624,000 in the CCSF and has committed to reclaiming this money. Whilst we welcome this commitment, we know from our other reports on COVID responses such as procuring Personal Protective Equipment and administering bounce back loans that the need to act at speed can reduce transparency and increase the risk of fraud and error. Recommendation: The Department should write to us within three months, setting out: how it judges the value for money of this contract and any lessons learned as to how and when it would apply a similar approach in future; and the fraud position across the package including how much money it has recovered.
Government Response
Acknowledged
HM Government
Acknowledged
3.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2021 3.2 As a result of the COVID-19 emergency and the need to meet tight deadlines to distribute funds safely, DCMS contracted external consultants to provide expert grant management. Consultancy services were procured in two phases and delivered under an output-based delivery model tied to key deliverables. Consultants worked alongside and under the instruction of experienced civil servants to provide operational support to the programme. Throughout both phases, weekly governance meetings were held to review scope, resourcing and progress in achieving the performance milestones and objectives set out in the contracts. PricewaterhouseCoopers have been judged to have met the relevant performance metrics at all stages. 3.3 It is difficult to determine how and when a similar approach would be applied in future given the specific national and far-reaching challenges presented to government in dealing with the COVID-19 pandemic. In line with the Cabinet Office guidance on consultancy and professional services spend controls, DCMS will continue to ensure that any proposal to engage professional services is thoroughly assessed on a case by case basis through its internal assurance process, including approval by the Commercial Director and through the Cabinet Office controls process as appropriate. 3.4 Post-event assurance on the DCMS elements of the charities’ financial support package is being conducted under a contracted service and is based on a sample-testing approach. As of 20 July 2021, 88% of the cases selected for testing were complete with no confirmed indications of fraud and/or error. Enquiries are still ongoing in relation to the remaining 12%. A determination of whether there has or has not been potential irregularity in those cases will be made once the inquiry is complete. The department expects to receive the report on post-event assurance by August 2021.