25 February 2000
The NAO report also castigates the department for its poor financial controls, which have led to an overspend of £1.14m.
More than 626,000 people were granted legal aid in 1998/99. Of the cases examined by the NAO, 32% were miscalculated and 7% were granted free legal representation without any evidence of entitlement. A spokesman for the NAO said it was unable to estimate the total cost of the errors as checking procedures were so poor.
The quality of the department's internal assurance division is also questioned, with the NAO's audits revealing a higher level of flawed payments. 'We acknowledge that the department has improved,' an NAO spokesman said. 'But more could be done. Courts are still granting legal aid without proper checks.'
The Lord Chancellor's Department now has to ask Parliament for an increase in funds to cover the overspend.
The report found that it failed to include 1997/98 rent payments in its accounts until 1998/99. The situation was only discovered at the end of 1998, by which time it was too late to make up the deficit.
The NAO has also refused to approve the Serious Fraud Office's appropriation account after the misinterpretation of accounting methods led to an overspend of £700,000. The office failed to use the correct VAT methods on contracted services.
Sir John Bourn, the auditor general, said: 'I am disappointed to have to report that financial control weaknesses in the Lord Chancellor's Department and incorrect accounting in the Serious Fraud Office mean that both departments have to ask for further Parliamentary authority to approve their expenditure.'
Last year, the NAO refused to approve 13 accounts out of the 700 it audited in central government.
PFfeb2000
