As has been indicated, this is a comprehensive and in-depth analysis of the Department's operations and systems. Taken together, both the interim and final reports represent a substantial piece of work. There are a total of 48 recommendations in the final report and there are also a number of recommendations from the interim report on which the Department has acted as I promised at my last appearance at this committee in July.
At a general level, I want to assure this committee that the Department takes the exercise extremely seriously and, as has been indicated, the Minister has expressed his support for the report and its findings. The Department sees the implementation of the recommendations as the priority task for the year ahead and work has already begun in that regard. The report has been noted by the Government and the Minister will report back to the Government within a two month time frame on its implementation.
I would suggest that the report should be seen in the context of the changes which have taken place in the Department and the changes with which the Department has had to contend over the past decade. The primary change has been the shift in the nature and style of the support system under the Common Agricultural Policy, and this has manifested itself in the fact that direct payments now account for over 50% of farm income and the Department now has over 196,000 clients and makes over 1 million payments annually.
The Department has indicated at previous appearances at this committee how we have reacted to the new situation through change in section procedures, the use of IT, especially through mapping individual farms and building up client profiles, a strengthened internal audit unit assisted by an external audit committee, accreditation of the Department as an EU paying agency and the certification of the annual EU account by independent auditors.
In addition, we must take into consideration other major issues and changes such as the way that food safety has come to the top of the agenda and a very difficult BSE crisis which rocked the beef industry to its foundation. I believe the Department has adjusted its approach and procedures to take account of these factors and, as has been indicated, the report recognises the progress which has been made and suggests that more needs to be done, a point the Department fully accepts.
There are a number of central themes running through it: financial management, risk assessment, best practice in control and inspection systems, the Department's IT strategy and data management. Each of the individual recommendations has been examined and an action plan is being put in place for their implementation. Some of the recommendations will clearly be easier to implement than others. A proportion have already been implemented and others are in the process of being implemented.
I want to focus on three areas which will be of particular importance in implementing the recommendations - financial management; information technology and organisational restructuring. Considerable attention has been directed to financial management and almost one quarter of the recommendations fall under that heading. It is important to note that the Department has met its statutory reporting and accounting requirements for national and EU funds but, in common with the wider Civil Service, there is scope for improvement and reform.
This particular category of recommendations fits very much into the generic model for financial management in the public sector which was adopted by the Government in July and which will be implemented in the various Departments over the next few years. Critical to this for the Department will be the implementation of the new accounts system, which will be central to the Department's efforts under this heading. The Department hopes to have the first phase of the new accounts system in place later this year, in other words, in time for the next FEOGA financial year in October.
The early implementation of the IT strategy, on which the Department has been working for the past six months, is also fundamental. The Department has made real progress in the area of IT in that a number of important projects are now either complete or nearing completion, and the Department has built very significant data banks of both applicants and animals and has established a client register.
The Department now has a revised IT strategy and that has shown the potential for improvements in the Department's systems. In realising that potential, I believe the Department can improve its service to clients and enhance its control systems. An important priority over the next two to three years will be to develop a pool of shared data which will be used across a range of schemes. The advantage of that is it will enable the Department to better target its inspections, further improve its control regime and have a fully integrated approach to support schemes.
We are also proceeding with the organisational restructuring of the Department and we are working on a structure which is in line with our strategy goals in regard to policy development, food safety, animal health, delivery of support schemes and accountability. The implementation of the new schemes from Agenda 2000 which started at the beginning of this year will constitute a major challenge in that they will bring new and complex schemes. In that task the Department is using the principles put forward in the Cromien report.
I should also add that we progressed the implementation of the recommendations in the interim report, to which reference was made, to the point where they have all either been implemented or are in the process of being implemented. In particular, we have strengthened the Department's management services unit, we have expanded the internal audit unit, a revised IT strategy is virtually finalised, decentralisation to Wexford, which was a difficult exercise, has been successfully completed and we have used risk management principles in regard to Agenda 2000 schemes as well as formulating a general policy on risk management in the Department. The outcome of the accreditation process, to which I referred earlier, is also, in itself, risk management. The Department is in the final stages of setting up a dedicated legal unit.
However, we are conscious that the systems themselves should not be the ultimate objective; they have to deliver results and better controls in the protection of public finances on the ground and ensure the problems encountered in the past are not repeated. The important deliverable is that we now have a plan to deal with the changed environment and the changed requirements on the Department. The new accounts system and the revised IT strategy will bring enormous added value and position us to have systems which will enable us to use data effectively, to target inspections and to have a correct balance between full accountability and giving a good customer service. Based on these systems, we will use concepts like risk management, unannounced inspections, analysis of the outcome of the inspections and overall this will leave us in a much better position. The report back to the Government at the end of February will represent the first milestone on that road.