On 1 April the Government Internal Audit Agency (GIAA) celebrated its first year of operation. In this article we look at the process, aims and objectives of an organisational change which brought about the establishment of this single, integrated internal audit service. 

In 2012 the Civil Service Reform plan was published by the then coalition government, focusing on up-skilling and improving the civil service. It included an aspiration to create shared services across departments, a move that gained momentum when the National Audit Office published a report examining the effectiveness of internal audit in central government, covering both main departments and their associated arm’s length bodies. 

The report’s conclusion – that the government was not getting value for money from the service, in part due to quality variations - proved to be another major catalyst for change. 

At the end of the 2013, the die was finally cast by a Treasury policy document – Review of financial management in government – which proposed consolidating internal audit services over the medium term and providing a single, integrated internal audit service as an independent agency to the Treasury. 

Migration of services

The new Government Internal Audit Agency (GIAA) was duly launched, using an existing cross-departmental shared service, initially focused on migrating services across from eight departments, including BIS, DCLG and the Cabinet Office. Others were picked up as the year went on with the latest to join on 1 April 2016 being the Home Office and the Department for Work and Pensions. 

‘This move doubles our size and means that, in terms of department and staff numbers, we have reached the halfway point. So there is still a long way to go’, said Ian Coates – chief operating officer, Government Internal Audit Agency, who spoke recently at an ACCA event. 

Although the government hasn’t opted for a ‘big stick’ approach to driving the organisational change and no date has been set by which all departments have to migrate over to GIAA, never to do so is not a tenable position. However, it is up to the agency to persuade the departmental accounting officers that the time is right to join by selling its benefits. 

‘We have spent a lot of time with accounting officers in different departments convincing them that joining us is the right thing to do,’ Ian said. ‘The power of the agency only happens when we get the majority of staff and services in with us. We knew that until we had that we didn’t have the economy of scale or weight of numbers to be able to implement necessary changes, investing in IT and making GIAA a more worthwhile place to work. 

'The addition of the Home Office and the Department for Work and Pensions gives us the solid ground on which to move forward and we have a commitment from MOJ and Defra to join us over the next 12 months', said Ian. 

Reversing perceptions

The agency’s vision for ‘a flexible and responsive internal audit service which has a reputation among top management of making a real difference, provides excellent value for money and is regarded as a great place to work,’ is important as, according to Ian,  it reverses common perceptions of internal audit. ‘As a profession we tend to be seen as staid and staying in our silos, rather than flexible,’ he said. ‘Neither have we always enjoyed a reputation among top management for making a real difference.’ 

GIAA seeks to change these perceptions but recognises that it faces many diverse challenges, including tackling and bringing together different individual working practices, local methodologies, cultures and working terms and conditions. 

‘There is a huge amount of disparity out there,’ Ian admitted. ‘Another major challenge is one of geography. Government is spread across the country, not all the headquarters are in London and there are currently 80 locations where staff are physically based. The question is: “How do we rationalise that footprint — not in terms of moving out of cities but in getting the power of all auditors sitting and working together and sharing ideas?”.’ 

So how did the agency get off the ground? Early steps included setting up projects around the design and mechanics of the organisation — getting a common payroll, deciding on the IT platform and specialist software, creating job descriptions and role profiles, creating branding, and addressing culture to name but a few. Each project was led by the chief internal auditors of the departments that had committed to join the agency. 

‘This was part of the carrot dangled in front of them,’ Ian said. ‘A commitment to joining the agency meant they could help design it. It was important that people felt part of the change and not that it had been imposed on them. Most have their own ways of doing things and probably from their perspective they work well. Having an agency come in and say they are throwing everything out of the window is hardly the way to win hearts and minds.’ 

‘It makes sense to have people inside who can harness the best parts of what already exists and help shape the future and that has been a huge part of the change programme. I won’t pretend it has all been straightforward. There have been differences of opinion along the way but we are getting to a place where there is a single way of doing things for the common good.’ 

Finishing touches

One of GIAA’s key priorities for the coming six months is to get the organisational design finalised and implemented. The senior management team is in place and includes two operational directors, each responsible for clusters of staff and a portfolio of customers. Area directors will pick up the challenges of the different geographical areas, picking up pastoral care and ensuring that everyone feels part of the agency. 

Job descriptions are being finalised and plans made for new investment in learning and development, supported by the funding now available through pooled budgets. The agency is keen to introduce a training scheme to attract new talent, whether that is graduates or more experienced people, and by doing so to start to invest in the next generation of auditors. On-the-job job mentoring across the agency will be important as part of a strategy to put GIAA on the ‘milk round’ map. Secondments – both in and out – will also be actively promoted. 

Delivering the agency’s work in a cost-effective manner is important, but cost savings are not the driver for establishing the agency, despite the current period of austerity. ‘The agency has not been created as a cost-saving vehicle,’ Ian insisted. ‘However, that’s not to say that it won’t achieve efficiencies, and we will respond to departments looking to us to reduce the cost of their service as part of their Spending Review settlement. On average, we expect to deliver 15% of efficiency saving across the first three years.’ 

Key objective

The agency’s key objective, however, is to deliver on its promise of making a real difference to top management by providing a service which is more flexible and responsive to their needs. 

On-going priorities include making use of the collective purchasing power of government internal audit; strengthening customer support around sharing best practice and access to specialist skills; and developing the framework for providing assurance around cross-government and inter-organisational risks. 

Ultimately, the aim is to expand GIAA to become the single internal audit provider to government.

Jill Wyatt - freelance journalist