Equality and Human Rights Commission has accounts qualified
By Vivienne Russell
15 July 2010
The Equality and Human Rights Commission has had its accounts for 2008/09 qualified because it breached rules on pay rises for permanent staff and failed to control expenditure elsewhere.
Pay rises for permanent staff at the EHRC have to be agreed each year with the Treasury and the Government Equalities Office, but the commission breached these agreed limits in both 2007/08 and 2008/09. Staff received pay increases of 6.81% (against a maximum of 4.65%) in the last six months of 2007/08 and 4.8% (against a maximum of 4.45%) in 2008/09.
However, the National Audit Office said the breaches were unintentional and reflected the fact that the commission employed fewer permanent staff than it did when the limits were originally agreed. The commission has said this problem was related to its set-up phases and should not recur.
The NAO also pointed to serious failings in procurement at the commission, including inadequate forward planning and lack of compliance with procedures. The commission entered into seven Single Tender Procurement Actions over £50,000 without seeking the appropriate authority from the Government Equalities Office.
The EHRC has since made significant improvements to its procurement processes, restricting the number of people who are authorised to raise requisitions and applying additional authorisation processes for high-value purchases, the NAO said. The commission is also taking action to ensure all staff understand its procurement rules and comply with them.
NAO head Amyas Morse said: ‘I have qualified my audit opinion on the 2008/09 accounts of the Equality and Human Rights Commission as a result of irregular expenditure in a number of areas. I am satisfied that it is taking the issues we have raised seriously although, until it develops fully effective financial and management controls, it will face continuing risks to its ability to manage its expenditure properly.’
Home secretary and minister for women and equality Theresa May said: 'Since it was created the EHRC has failed to produce a single set of clean accounts. The government is totally committed to creating a more equal society for everyone, but we’re also committed to cracking down on waste and failure.
'The EHRC has a track record of not being careful enough with taxpayers’ money and these accounts show that problems there persist. Failure to deliver will not be tolerated by this government - we will look at further sanctions if the problems highlighted by the auditors are not dealt with.'
But Neil Kinghan, EHRC director general, said: 'These accounts relate to the financial period ending in March 2009. Since then the commission has made significant changes to its senior management team including a new director general and new finance director. We also have a new board with a stronger audit and risk committee and accountability mechanisms in place. We are confident that these measures are securing more effective financial and corporate management.
'The commission has already made a real difference for millions of people since it was set up. Now, more than ever, we have a vital role to play in ensuring that in this economic climate, public bodies pay due regard to the law when they implement budget cuts and that the most vulnerable people do not suffer unfairly as a result.'
He said the commission’s priority was to deliver value for public money in maintaining its work protecting equality and human rights for everyone.