Auditors have today qualified the Equality and Human Rights Commission’s accounts for the third year running.
National Audit Office head Amyas Morse voiced alarm over the organisation's lack of financial understanding and competence.He criticisms included payment of unauthorised salaries, unjustified procurements and write-offs and a failure to control grants paid to organisations.
Morse said the EHRC had improved its financial controls in the past two years but had made insufficient progress.
He remained concerned ‘about the culture of the commission with regard to financial and administrative controls’.
He added: ‘It is clear that there is little general financial understanding or competence in the organisation, and that many managers have limited experience of the effective management of public money.’
Morse noted that many senior posts were occupied by interim appointees and feared that the limited progress made on financial management would be lost when they left.
He called for a financial director to be appointed as a full member of the commission’s senior management team to ‘send a clear message to the organisation of the importance [it] gives to financial control and management’.
Morse condemned the EHRC for failing to agree its annual salary remit with the Treasury for 2009/10 until a year after the period to which it should have applied, and for paying salary increases to some staff in the absence of the remit.
Commission staff also procured £2.37m of goods and services without the required authorisation from its parent body, the Government Equalities Office.
The GEO refused to provide retrospective approval for this ‘because it considered it had not been given sufficient justification’, the report said.
Up to 35% of EHRC purchase orders were not raised until after the invoice concerned had been received, so that ‘commission staff are committing funds without going through proper processes and are avoiding some of the checking processes’.
Problems with the EHRC’s website led it to write off £874,000 of its value, also without GEO consent.
Auditors also found grants worth £2.6m were paid to organisations without a ‘rigorous programme of monitoring or assurance gathering’.
Morse said the commission had ‘put improvements in place to strengthen financial controls [but] these changes need to be complemented by a stronger culture of proper management of public money throughout the organisation’.
The EHRC said the National Audit Office recognised that many of the commission’s financial problems had their origins in the rushed start-up of the body.
‘The commission is committed to delivering value for public money and very much regrets the fact that its accounts have been qualified. It has just appointed a new, permanent CEO with a mandate to move quickly forward, with plans already in place for extensive reform,’ a statement said.
