8 December 2010
There have been significant problems with the accounts of the Welsh Audit Office, two separate inquiries have found.
An internal review and a report from the National Audit Office – requested by the WAO – were released yesterday. They found significant governance problems within the organisation. The reviews also said that the accounts failed to recognise the ongoing pensions commitments of staff leaving the company, which is contrary to Treasury guidelines.
The NAO found that the system for the review and approval of accounts ‘did not operate effectively’ in the period 2005 to 2010. It said that the findings from the internal reviews of accounts ‘were not taken on board’.
A letter from the new auditor general for Wales, Huw Vaughan Thomas, to the Welsh Public Accounts Committee stated that there were matters of ‘serious concern’ for the body. He said that the internal review showed that the auditor general’s 2009/10 accounts ‘misstated the financial position of the Wales Audit Office’. Furthermore, the ‘governance arrangements over the preparation of the auditor general’s accounts must be strengthened’.
The office believes there are three significant factors causing the problems. The first was the role of the former auditor general Jeremy Colman. He instructed the head of finance not to disclose the leaving package for the chief operating officer, the letter to the committee said. When asked by a member of staff whether there was a package, he responded there wasn’t. The WAO is conducting a due diligence report, to be released in the new year, so it was not able to inform the committee any further.
Secondly, there were issues surrounding the governance of the WAO.
Thirdly, the role of the external auditors was called into question. The auditors – KTS Owens Thomas – failed to recognise several problems, including the leaving package.
It is thought that staff morale at the WAO has been affected.
The inquiries found no truth in allegations that the WAO took millions of pounds from public bodies for work that was not carried out.
