By Vivienne Russell | 26 February 2013
The Department for Culture, Media & Sport was late filing its first fully consolidated accounts because it underestimated the complexity of the task and the finance capacity needed, the National Audit Office revealed today.
Auditor general Amyas Morse said the department’s focus on delivering the 2012 Olympic and Paralympic Games meant it originally planned to prepare the 2011/12 accounts in the autumn, filing them in December. ‘This still allowed a period of more than four months to prepare the accounts,’ the NAO noted.
‘However, the department underestimated the complexity of the task and lacked the necessary capacity in its finance function, meaning that an extension to the statutory deadline had to be granted, and additional help needed to be purchased.’
Commenting on the NAO’s findings, Public Accounts Committee chair Margaret Hodge said it was ‘unacceptable’ that the department was unable to complete the routine process of preparing accounts on time.
She said: ‘Despite an extension, I am astonished that the department was still incapable of producing its accounts without buying in external consultants. My concern is that these are the marks of a department with a feeble grip on the complexities of its own finances. This needs to dramatically improve in the future if Parliament is to have confidence that the department has control over its books.’
But in response, a DCMS spokeswoman said: ‘Making sure the largest logistical peacetime operation of the London 2012 Olympic and Paralympic Games was delivered on time and on budget meant that DCMS was unable to focus on consolidating all 50 of its [arm’s-length bodies] into accounts for the first time, until autumn 2012.’
She added that the accounts were published on February 25, three weeks later than planned.
The department has committed to undertake a review of the 2011/12 accounts process, a move that was welcomed by the NAO. Auditors said the DCMS should learn lessons from the exercise and ensure it could account to Parliament in a timely manner in the future.
Morse also today said he was unable to fully sign off on the department’s 2011/12 accounts because of the way the BBC had recorded its tangible non-current assets. The corporation had accounted for the assets, which include land, buildings and machinery, at depreciated cost rather than under the fair value convention.
‘The BBC has indicated to the department that it will supply figures on a fair value basis for future years,’ the NAO said.
The DCMS spokeswoman said: ‘The BBC, as a constitutionally independent public broadcasting authority, legitimately works to a different set of accounting standards to those that the DCMS is obligated to use.
‘The NAO is required to use the Treasury’s reporting conventions in auditing its consolidated accounts, which require a different method of asset valuation.’
