21 June 2002
Just 22 out of 49 Whitehall organisations managed to meet the statutory deadline laid out under rules governing the introduction of resource accounting, according to Parliament's spending watchdog, the Public Accounts Committee.
All bodies were supposed to have submitted their accounts for 1999/2000 to the National Audit Office eight months after the end of the financial year.
'After five years' preparation for resource accounting, it is unacceptable for departments not to have the systems and skills to enable them to comply with the law in this respect,' the committee's report said.
It will be an embarrassment for Chancellor Gordon Brown that the Treasury, which has overseen the introduction of the new accounts system, was among those that missed the deadline.
The PAC's examination of the progress made in implementing resource accounting also found that 12 departments had their accounts qualified for 1999/2000, again including the Treasury.
Although this was an improvement on the 30 that had not been passed the previous year, MPs said there were still 'significant problems' in some departments.
'These included systems that provided inadequate audit evidence, failure to apply required accounting policies and a lack of proper review,' they found. The committee called on the Treasury to ensure that these 'residual problems' are resolved before the 2001/02 accounts are filed.
Two departments, the Home Office and the Department for Environment, Food and Rural Affairs, were singled out for particular criticism. PAC committee chair Edward Leigh said they had made 'virtually no progress over the past year.' Defra does not expect to produce unqualified accounts until the 2002/03 financial year.
Availability of sufficient staff with the necessary expertise is a significant factor holding up progress in the move towards resource accounting.
MPs said: 'Departments need to implement action plans for dealing with these problems and the Treasury needs to monitor implementation regularly.'
They also questioned the wisdom of the Treasury's plans to bring forward the deadline for submitting departmental accounts to the NAO, on the grounds that it could lead to 'significantly more qualified accounts, of less value to Parliament'.
The committee urged departments to do more to incorporate resource-based financial information in the day-to-day decision-making process.
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