Thursday 19 September 2019 - Report

Financial Management and Internal Control

Topics: Financial Management and Internal Control

Departments: Treasury & Exchequer

Sector: Financial Management & Internal Control

Report - FMIC - 19.09.2019

Report: pdf (1.12 MB)

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Effective financial management and internal control are essential underpinnings for the delivery of economic, efficient and effective public services. Since 2014, the C&AG has issued a series of reports relating to financial management and internal control:

  • Internal Audit (March 2014) and Internal Audit Follow-Up (August 2015)
  • Financial Directions (August 2014)
  • Financial Management – Part 1 (April 2015)
  • Financial Management – Part 2 (February 2016); and
  • Risk Management (September 2017).

Since then:

  • there have been important legislative changes
  • the Government is implementing a wide-ranging One Government (One Gov) initiative; and
  • The Public Accounts Committee (PAC) has reported on recurring themes from its reports and is holding a series of hearings on key areas, including on financial management.


The review evaluates:

  • the progress made in implementing agreed recommendations in the reports listed above either individually or as part of wider change projects
  • the extent to which the recommendations as implemented have addressed the improvement areas identified; and
  • the adequacy of plans for the implementation of any outstanding recommendations.


Progress was made in implementation in some areas, such as internal audit, but in others progress was until recently slow. The due diligence review undertaken on the appointment of the Chief Executive echoed the C&AG’s findings and led to the establishment of a range of finance modernisation initiatives, including the Finance Transformation Programme.

Taken together, the finance transformation initiatives are a wide-ranging and ambitious programme.  This is delivering implementation or progress in the implementation of recommendations at a pace that the C&AG has not previously seen.

Where recommendations have yet to be implemented or fully implemented there are in many cases plans for implementation. However, further investment of time and resources is needed both to implement recommendations and to embed new ways of working. This includes:

  • effective management of the finance modernisation initiatives, including the commitment of and action by departments outside Treasury and Exchequer 
  • collective action to embrace ongoing cultural change; and
  • a culture of good governance being seen as the bedrock on which successful change is built and embedded.


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