28 July 2010
Three Whitehall departments and two quangos have had their accounts qualified by auditors, raising renewed concerns about the finance function in central government.
The National Audit Office this week raised significant concerns about the accounts of the Department for Work & Pensions, the Ministry of Defence, the Department for Environment, Food & Rural Affairs, the UK Statistics Authority, and the Rural Payments Agency.
All the reports covered the 2009/10 financial year.
The DWP has had its accounts qualified every year since 1988/89, due to high levels of benefit fraud, and errors made by both claimants and officials.
In 2009/10, fraud and error rose from £2.7bn to £3.1bn, 2.1% of the total paid in benefits compared with 2% the previous year.
The MoD’s accounts were qualified for the fourth year in a row.
NAO head Amyas Morse identified ‘systemic and deep-rooted’ problems with the department’s accounting.
Defra and the RPA had their accounts qualified because of ongoing difficulties in administering the Single Payment Scheme, through which European Union grants are allocated to farmers.
The department has been fined £160m by the EU because the RPA has been unable to estimate underpayments and overpayments made under the scheme.
Meanwhile, the UKSA spent more money than it was authorised to in 2009/10.
Professor Colin Talbot told Public Finance that some Whitehall departments still did not have qualified professionals running their finance departments.
He added that recent reforms to accounting practice and standards made the job more complex.
Talbot said: ‘This does matter, quite a lot. We’re talking about discrepancies of hundreds of millions of pounds of taxpayers’ money.
‘The problem, particularly with the MoD, is that the longer this goes on, everybody will end up accepting that its accounts get qualified every year and nobody will take much notice of it.’