Audit

You can read reports several ways. The BBC Trust and Executive have welcomed the latest report from the National Audit Office, on the corporation's major contracts (above£2m a year) with the private sector. Both the Trust and Executive, in their summaries, have slightly subbed the recommendations - or said that most of the changes the NAO wants are now in place. The BBC side highlights lines such as "exceeding savings targets" and "securing the contractually agreed minimum levels of service for 91 per cent of the indicators specified".

Services received under these strategic contracts include: technology (Siemens), digital terrestrial television transmission (Arqiva), human resources (Capita) and facilities management (Johnson Controls Limited and HBML Limited). You ask BBC staff if some of these contracts deliver value-for-money, and, in some cases, you'll get a pretty ripe answer.


Here's the recommendations unsubbed from the NAO Executive Summary.

• The BBC has secured just over 90 per cent of its performance objectives, but has not achieved the performance and innovation it requires for the price it is willing to pay in some contracts


• Although the BBC has examples of good practice in contract management, it has yet to apply this learning consistently across the portfolio of strategic contracts, and needs to do more work to match its resources to areas of greatest need and opportunity


• The BBC may not have visibility of risks that arise where strategic suppliers are dependent on the services provided by other strategic suppliers, and the BBC has no systematic process for identifying these risks


• Open-book access rights to suppliers’ financial records, which are secured at a financial cost in contract negotiations, will only enhance contract management if they are effectively applied. For all but one of the contracts we examined the BBC has open-book audit rights but has not exercised them


• Although individual contracts have risk registers, the BBC does not maintain a joint risk register with the suppliers for each contract, so there is a lack of clarity about the responsibility for management of shared risks


• Although the BBC identifies key deliverables on a contract by contract basis it does not have business-wide criteria by which it identifies the relative importance of deliverables to its business


• BBC management does not routinely validate performance information provided by suppliers, even where reported information has a bearing on payments to the supplier


• The BBC Trust approves strategic contracts in part on the basis of forecast savings. It does not follow up whether forecast savings for individual strategic contracts have been delivered

The NAO's graphs don't alway reproduce well here, but below is a chart indicating BBC compliance with good practice for six contracts examined in case studies. All you need to know is that yellow dots mean "little evidence of good practice with room for improvement in more than one significant area".