Recent trends in the NAO annual report weaknesses : an analysis

Abstract

PURPOSE: This study is based on the NAO Annual Report on Public Accounts. The objectives of the research are to analyse and classify the reported issues, evaluate their significance and how the findings are reflected in the Public Sector, and assess the adequacy of the communication of these findings through the Annual Report. DESIGN: The bulk of the research consisted in a qualitative analysis of the Annual Reports for the years 2007, 2009 and 2011. The conduct of unstructured interviews with NAO and Government officials provided corroborative evidence to the preliminary results and was instrumental in obtaining a balanced view of the situation within the Public Sector. FINDINGS: The NAO reports a significant number of issues emerging from different factors. The highest incidence of weaknesses was recorded in record] keeping and compliance with policies and procedures. Moreover, the interviews with NAO officials show that the departments are not always taking the recommendations made through the Annual Reports into consideration. This may indicate a passive attitude with respect to the reported findings. CONCLUSION: The results show that there is still much room for improvement within the Public Sector in order to be satisfied that public funds are appropriately used. However, the Government has its own structures of checks]and]balances to prevent errors from happening and maintain control, although one has to remember that no internal control system is completely effective. Thus, detection of issues by the NAO is inevitable. Matters are made worse when coupled with the complexity and size of the Public Sector. VALUE: This study continues to elaborate on previous studies addressing Public Sector Auditing in Malta. NAO findings should be more thoroughly examined to reduce the incidence of issues. The way forward should be directed at enhancing the current systems and promoting a more positive relationship between the NAO and auditees.