I thank the Chairman and members of the joint committee for the invitation to appear before them. I understand members have been given copies of the most recent annual report of the audit committee which includes the committee's charter. I shall, therefore, limit my remarks to a brief summary rather than reiterate all our recommendations.
The audit committee, a voluntary body, reports to the Secretary General and plays an important role in the accountability framework of the Department. The committee provides an independent appraisal of the audit and evaluation function of the Department including the multi-annual evaluation and audit work plans and their implementation. These plans cover review of internal control, risk management systems and value for money.
It is important, however, to note that it is the Comptroller and Auditor General who has responsibility for the audit of all departmental expenditure. Put simply, the audit committee's role is to provide constructive advice to management to strengthen internal control and risk management to optimise value for the taxpayer in the work of the Department, including the aid programme. The committee engages with the Secretary General, senior management and the staff of the evaluation and audit unit during the year on the topics covered in the work programme. As part of its work, members of the committee also meet with representatives of the Comptroller and Auditor General.
The audit committee's annual report is based on the work programme during the year and its main observations and recommendations are structured into five main areas, namely, management information systems and internal controls, internal audit, evaluation, risk identification and organisational and resource matters. Given its size and complexity, the greater part of the audit committee's work programme and annual report content is directed towards the aid programme.
To give members some idea of the extent of the committee's work, our current programme includes the following: advising the Secretary General on updating the audit committee charter; an ongoing review of public financial management in programme countries; an update on the status of past audit committee recommendations; an update and review of audit and evaluation coverage and reports for both Votes; endeavours to arrange a meeting with internal audit and evaluation officials of the Department for International Development in the United Kingdom; consideration of the management review of Irish Aid; an update on departmental risk management systems; an update on aid effectiveness, including donor co-ordination; a further meeting with the Comptroller and Auditor General; a review of a travel and subsistence audit; and an update and review of arrangements for audits of non-governmental organisations.
As I stated, the committee exercises oversight over the evaluation and audit function. It is important to note the two main roles of the evaluation and audit function are to manage the evaluation programme, including value for money reviews to assess the effectiveness and efficiency of programmes and, in particular, their impact and to review internal control systems and provide assurance as to the proper use of public funds.
On the aid programme, the evaluation and audit unit is also supported by internal auditors who are based in the embassies in the programme countries. The audit committee welcomes the deployment of these auditors as evidence of Irish Aid's commitment to accountability. As far as we are aware, Ireland is the only donor with internal auditors based in its field offices. The audit committee is impressed with the effectiveness of the Department's evaluation and audit function.
I propose to highlight some of the key issues raised by the audit committee and how these are being addressed. Development aid is complex and there is a continuous challenge to find the right balance of programmes and modalities which will optimise efficiency and effectiveness. The nature of donor programmes has been evolving in recent years, with greater levels of funding now going directly to partner Governments through modalities such as budget support. This contrasts with the more direct project-type funding of the past. The audit committee understands the logic for this approach, which aims to strengthen Government partners' ownership of their development programmes and enable donors to better influence the shaping of policies for health, education and so forth. However, we have highlighted in our recent reports our concerns that there are significant weaknesses in partner government systems and these shortcomings result in qualified audit reports.
The audit committee has noted the efforts of Irish Aid, working in partnership with other donors, to strengthen the systems of public financial management in partner countries and has recommended that these be continued. In addition, it is essential for partner countries to build the capacity and competence of national auditors general. It is also important that Irish Aid continues to develop its level of resident expertise in the area of public financial management.
The audit committee has also commented in its reports on the level of staffing resources in Irish Aid generally and in evaluation and audit specifically. The committee is conscious of the Government's overall efforts to reduce headcount as part of the requirement to get public finances in order. Mindful of this reality, the committee restates the importance of maintaining the skills and competences needed to run a complex aid programme and ensure an effective evaluation and audit function.
We are pleased the Secretary General and senior management have taken our recommendations seriously and most recommendations have been accepted. A system is in place to track implementation of our recommendations and we have seen a gradual improvement in systems and controls over the past five years. That is a brief summary of our role and work. I am aware members of the joint committee will want to explore our work further and I and my colleagues will endeavour to answer any questions they may have.