Rural Payments Agency accounts passed by auditors

10 Jul 14
The Department for Environment, Food and Rural Affairs and the Rural Payments Agency have filed a clean set of accounts for the first time in six years, the National Audit Office confirmed today.

By Vivienne Russell | 10 July 2014

The Department for Environment, Food and Rural Affairs and the Rural Payments Agency have filed a clean set of accounts for the first time in six years, the National Audit Office confirmed today.

But the auditors are warning that the level of European Commission penalties imposed on Defra means the risk of future qualification has not been dispelled.

The NAO said today that the department had made ‘good progress’ in identifying, quantifying and rectifying incorrect payments to farmers and other claimants following the introduction of the troubled Single Payment Scheme.

‘I am please to note the good progress made by the department and RPA in rectifying past overpayments and underpayments to farmers, and in processing payments more accurately,’ said NAO head Amyas Morse.

However, the watchdog noted that the European Commission imposed £42m in penalties on Defra in 2013/14 because the department had failed to apply regulations in the processing of EU schemes correctly.

While £42m was a 'significant cost' to the taxpayer, the NAO said it was not material in the context of the £3.4bn of European Commission-funded expenditure managed by Defra, and therefore was no qualification of the 2013/14 accounts.

‘The comptroller and auditor general has noted, however, that the accounts include a provision of £84m for future penalties, which are subject to challenges, but demonstrate that significant future penalties are likely,’ the NAO said.

‘Penalties for the current EU schemes, which run to 2014/15, will not be fully calculated and settled until 2019/20. Once finalised, these penalties could lead to the qualification of future accounts.’

An RPA spokesman said: ‘Over the past two years we have completed a highly successful strategic improvement plan, which has stabilised the gency and helped us deliver our best ever performance. As a result today’s RPA is a lean, agile and high performing organisation which is ready for the challenges ahead. 

‘The scale of the agency’s transformation has been recognised by the Department for Environment, Food and Rural Affairs, which has made us responsible for the delivery of all EU payments, not just the new Basic Payment Scheme. The announcement by the National Audit Office lifting the third and final element of the debt qualification on our accounts - which has been in place since 2008/09 - also demonstrates how far we have come.’


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