Netherlands Court of Audit: Accountability Audit 2018

The extra billions parliament released for the government did not produce many tangible results in the past year. It was often difficult to get the money rolling.

The Court of Audit’s Accountability Audit for 2018 paints a mixed picture. Where it was decided to increase investment, it was not always possible to actually spend the money. And where it was decided not to spend more money, some government services deteriorated. The Court believes this apparent paradox is due in part to prior-year spending cuts and economies.

Of the €5 billion in additional funding, the Court calculates that €1 billion has been rolled over to later years. Several factors can explain why it was not always possible to apply the additional funding. It takes time to prepare and implement investments and time to hire, train and deploy new employees, especially now that demand for workers is outstripping supply. The Ministry of Defence is a good example of the former: 6 years can pass between the decision to procure a supply ship and its launch. The latter is a problem for the police and the Employee Insurance Agency (UWV).

The Court of Audit examined how the healthcare, defence and primary education sectors and Rijkswaterstaat, the Directorate-General for Public Works and Water Management, spent the extra funds and their effectiveness. It audited plans to improve the quality of nursing home care, spending increases at the Ministry of Defence, police and UWV and funding to reduce the workload at primary schools.

The Court also investigated the maintenance of bridges and locks in the main waterway network. Maintenance work on the network to an amount of €414 million has been postponed in recent years, partly because of budgetary restraints. In contrast, the government released an additional €543 million for new infrastructure; this funding was not applied in 2018 but was rolled over to 2020 and 2021 in view of the preparation time required before construction can start.

In sum, the Court of Audit’s President, Arno Visser, said on submission of the Accountability Audit documents to the House of Representatives, ‘Extra funding does not immediately produce tangible results. And there is still overdue maintenance in places where money is not available. We understand why this is but wonder whether the situation will change in the years ahead.’

Strategic personnel policy needed

A problem in the healthcare, and primary education sectors and at the police, UWV, Tax and Customs Administration and Ministry of Defence is that wheels will not start turning until more people are hired. Money is available to modernise the armed forces, improve the quality of nursing home care, strengthen the police and reduce the workload at primary schools, and on the whole enough people work in the public sector. But the lack of teachers, police officers, geriatric carers, commandos, engineers, IT specialists and procurement officers is a major concern. Sometimes, more people leave a sector than join it; this is the case in the armed forces and the police.

The Court of Audit warns that it is uncertain whether the necessary staff will be found in the current tight labour market. Given the responses of the Minister of Finance and the Minister of the Interior and Kingdom Relations, the government has not taken heed of this warning.

More attention needed to maintain ICT

Better government services stand or fall on good operational management. The Court of Audit notes that the government has not performed as well in this area as in previous years. This year, the Court carried out a government-wide audit of the state of ICT.

The quality of government services is underpinned by the reliability of digital systems. Anyone applying for housing benefit, making a report to the police, accepting a new job or seeking social security, for instance, must be able to rely on them. However, of the 47 operational management shortcomings the Court found, 19 related to ICT and data security. In the Court’s opinion, the importance of ICT has registered on the political radar. But new ICT projects have priority rather than maintenance of existing systems, even though the latter cost far more than the former.

Tax and Customs Administration: no quick fixes

More than half the Tax and Customs Administration’s systems are badly out of date and accordingly expensive to maintain and difficult to upgrade. A modernisation plan and funds to implement it are in place but not the personnel. In 2018, as in previous years, demand for IT personnel was far higher than supply. More problems arose during the year than could be resolved. President Visser cautioned, ‘There are no quick fixes’.

The Court of Audit observed that employing more IT specialists by itself was not the solution. ’The organisation’s absorption capacity must also be taken into account.’ To arrive at the planned 29,600 FTEs in 2019, the Administration must recruit some 3,450 full-time employees, nearly 12%.