03 February 2006
The Home Office is set to move a key accounting unit from Liverpool to its London headquarters to help prevent a repeat of the 'spectacular' financial errors unearthed by auditors this week.
Public Finance has learnt that up to 16 posts will be transferred from the Northwest to the Home Office's building in Westminster, following a joint decision by the department's new finance director, Helen Kilpatrick, and its permanent secretary.
A Home Office source said the decision would strengthen the department's core finance function 'at its very centre'.
Private sector accountants have also been asked to review the department's accounting practices 'to establish whether any additional steps need to be taken'.
The moves follow a stinging attack this week from the National Audit Office, which said that the Home Office's annual accounts for 2004/05 were so late and in such a mess that auditors were unable to determine if they were correct.
The Home Office has become the first department for many years to suffer the indignity of being told that auditors 'could not reach an opinion on the truth and fairness' of its accounts, which were supposed to outline how the department's annual £13bn budget was spent.
Former permanent secretary Sir John Gieve, who left recently to become deputy governor of the Bank of England, could be asked to appear before MPs to explain why the NAO reported that accounts were 'riven with numerous inaccuracies'.
The NAO said the Home Office missed a deadline to submit its draft accounts by June 2005. Instead, it filed its first submission in September and a re-draft by mid-December.
Auditors later discovered that the re-draft required a £946m 'adjustment' in order to reconcile the department's initial cash position. 'Nearly every major balance had changed significantly,' an NAO spokesman told PF.
Problems were blamed on difficulties in implementing a new accounting IT system. But Public Accounts Committee chair Edward Leigh said: 'It is extraordinary that one of the principal departments of state should fail so spectacularly to meet its accounting obligations to Parliament.'
A Home Office spokeswoman said that Kilpatrick, who joined the department at the end of the 2004/05 financial year, and new permanent secretary Sir David Normington had acted to avoid future problems.
PFfeb2006
