MoD and DWP accounts qualified again

19 Jul 11
Both the Ministry of Defence and the Department for Work and Pensions have had their 2010/11 accounts qualified.

By Vivienne Russell | 19 July 2011

Both the Ministry of Defence and the Department for Work and Pensions have had their 2010/11 accounts qualified.

The MoD’s accounts did not fully comply with International Financial Reporting Standards and the DWP’s were qualified because of a material level of fraud and error in benefit spending, according to the National Audit Office.

The Ministry of Defence did not comply with the IFRS requirement to determine whether a contract contains a lease, thereby omitting a ‘material value of assets and liabilities’ from its Statement of Financial Position.

This is the second year that the NAO has qualified the MoD’s accounts since the introduction of IFRS in central government.

The NAO also found inadequate evidence to support the accounting for £5.3bn of military equipment, including £0.1bn of Bowman radios. The MoD accounted for almost 51,000 radios but could supply serial numbers and location dates for only 37,645 sets.

NAO head Amyas Morse said: ‘The department is still not able to provide enough evidence to support the accounting for over £5.3bn worth of military equipment, and it has also failed to follow proper accounting requirements with regards to leases for the second year running. Therefore I am qualifying my audit opinion.’

At the DWP, the NAO found approximately £1.2bn was lost to fraud, £1.2bn to customer error and £800m to official error.

Accounts at the department have been qualified every year since 1988/89.

Morse noted that the DWP had refreshed its approach to tackling fraud and error. He added that the introduction of Universal Credit to replace some of the most complex means‑tested benefits should also help address the problem.

‘No system to administer benefits can ever be perfect but I believe that there is scope for the department to reduce fraud and error levels significantly. I therefore welcome its commitment to do so, as shown by the refreshed approach it intends to take to driving down incorrect payments,’ he said.

Spacer

CIPFA logo

PF Jobsite logo

Did you enjoy this article?

AddToAny

Top