The most recent articles from Accountancy Age

FAS chief in fraud probe row

AA Freelancer — 2008-10-03T14:25:00.000Z

AA Freelancer, Accountancy Age, Friday 3 October 2008 at 14:25:00

The head of FAS has rejected claims he tried to interfere with an audit into the misuse of funds at Ireland 's state training agency.

The head of FAS has rejected claims he tried to interfere with an audit into the misuse of funds at Ireland's state training agency.

Rody Molloy defended his decision not to inform John Hurley, Comptroller and Auditor General at Ireland's public spending watchdog, about the probe.

At the Dail committee hearing yesterday it also emerged a second Garda

investigation has begun into the alleged misuse of funds at FAS.

A senior executive at FAS, who is the subject of a fraud probe, has been on

sick leave since June.

The committee heard how John Hurley was not told about the internal inquiry, which took place between 2004 and 2006, until last year.

For further information: http://www.oireachtas.ie/viewdoc.asp?DocID=10048

Royal Palace accounts fall short of cash

AccountancyAge.com — 2008-09-25T08:25:00.000Z

AccountancyAge.com, Accountancy Age, Thursday 25 September 2008 at 08:25:00

Mounting costs of maintaining the Royal household is leaving the Queen short of cash to balance her books

The government’s yearly payment to the Queen of £6.5m will fall well short of the increasing Civil List expenditure, estimated to reach £14.4m this year, part of a dispute over royal demands for more public funding to cover the mounting costs of the monarchy.

An investigation of the royal accounts by The Independent and Baker Tilly has found that, by 2011, the Queen will be unable to balance her books as the increasing cost of maintaining the Royal Household will be more than double the £7.9m allocated by Parliament.

However, the Government is refusing to pay more than the £15m it currently pays for the maintenance of the Queen's occupied palaces and is not prepared to raise the £7.9m Civil List which pays for the monarch's public functions.

Palace aides say that without increased funding the Queen will no longer be able to pay for the upkeep of her palaces, which they estimate will require £32m to refurbish and maintain over the next 10 years.

Further reading:

Read the story in the Independent story

Lib Dem dissent over Clegg’s tax-cutting policy

AccountancyAge.com — 2008-09-18T08:10:00.000Z

AccountancyAge.com, Accountancy Age, Thursday 18 September 2008 at 08:10:00

Party dissenters call Clegg’s tax-cutting policy into question as they cheer for ‘social justice’

Liberal Democrats questioning Nick Clegg’s tax-cutting policy made clear their wish for the party to remain committed to ‘social justice’ yesterday by giving this part of Clegg's first conference speech as leader the biggest cheer of the day.

Clegg stressed the party's new pledge to offer low-and middle-income voters up to 6p off income tax to ease the pressure of soaring food and fuel bills, the Scotsman reports.

Tavish Scott, the Scottish Lib Dem leader, also wanted the Scottish Parliament to use its tax-altering powers to slice 2p off income tax as an emergency measure.

Clegg said the time was right to abandon the party’s long-standing pledge to increase taxes when the Labour government's annual spending had doubled to £600bn.

Further reading:

Lib Dems to claim tax cut mantle

Read the Scotsman story

LibDems call for tighter laws in financial sector

AccountancyAge.com — 2008-09-16T08:58:00.000Z

AccountancyAge.com, Accountancy Age, Tuesday 16 September 2008 at 08:58:00

LibDem deputy is calling for tighter regulation of the financial markets in wake of Lehman collapse

In the wake of the Lehman collapse, Liberal Democrats deputy leader Vince Cable has called for tighter regulation to end the ‘dangerous ambiguity’ of when the government should step in to save troubled financial institutions.

Speaking at the at the Liberal Democrats conference yesterday, he urged the chancellor to clarify the conditions ‘when government intervenes to save an institution and when it does not’, The Financial Times reports.

He was warning of ‘very grave’ consequences from the Lehman collapse, including problems in credit markets which had a ‘potential destructive capacity’ of a different ‘order of magnitude’ from property markets.

He said the financial sector could not revert to past practices and would have to be ‘much more tightly regulated in the public interest’.

Further reading:

Clegg faces dissent over tax cuts

Read The Financial Times story

KPMG UK snaps up DoH contract

AccountancyAge.com — 2008-09-12T08:41:00.000Z

AccountancyAge.com, Accountancy Age, Friday 12 September 2008 at 08:41:00

KPMG UK has been awarded a DoH contract to work with the boards of PCTs

A consortium led by professional services firm KPMG has been awarded a contract by the Department of Health (DoH) to work with the boards of Primary Care Trusts (PCTs) to help them in their new role as commissioners of healthcare services.

The Department of Health has launched a programme to develop the knowledge, skills and competencies of PCT board members which will be delivered through a national framework contract.

The department has awarded places on the framework to seven bidders, including the KPMG-led consortium, Consultant-News.com reports.

Over the coming months, KPMG and its partners, Dr Foster Intelligence, Manchester Business School, Morgan Cole and Role Plays for Training, will work closely with PCT boards to understand their strengths and development needs, build up their skills and enable them to become truly world class as commissioners of healthcare services on behalf of local people.

Further reading:

Read the Consultant-News.com story

Poor accounting at the centre of charity malpractice

Penny Sukhraj — 2008-09-10T09:44:00.000Z

Penny Sukhraj, Accountancy Age, Wednesday 10 September 2008 at 09:44:00

The Charities Back on Track report is the result of 799 assessments of charities in the last year

Poor basic accounting and reporting practices are still the main causes of malpractice among charities, according to the Charity Commission.

This assessment comes out of the commission's first annual review of the key themes that arose from its compliance work from April 2007 to March 2008.

The Charities Back on Track report – a result of 799 assessments of charities in the last year – said that while good governance is key to all aspects of running a charity, the basics are sometimes overlooked.

'Accounting and reporting requirements are not merely an administrative requirement for charities… they are important tools helping charities balance the books, plan for their future and account for their income and spending. Ensuring charities meet their reporting requirements will be increasingly important as public scrutiny of charities' effectiveness grows,' the report said.

The report also highlighted a lack of proper controls which exacerbated existing problems and made it harder for charities to get back on proper footing when problems arose.

Further reading:

Charities Back on Track report

Profile: Andrew Hind, chief executive of the Charity Commission

SFO probe to unveil first case under changed plans

AccountancyAge.com — 2008-09-09T22:42:00.000Z

AccountancyAge.com, Accountancy Age, Tuesday 9 September 2008 at 22:42:00

SFO investigators expect to unveil their first fraud cases under its contentious plan to team up with business

The first cases in the Serious Fraud Office's ‘partnerships’ with the City will be unveiled soon, according to watchdog director Richard Alderman.

Alderman, an SFO outsider brought in earlier this year – told the Financial Times the new approach of working more closely with big business and other watchdogs would help resolve problems which had long hampered the fight against corporate fraud and bribery.

Alderman said the SFO would continue to bring cases to court but would also do US-style deals under which businesses would be offered leniency in exchange for confessions.

‘There has been some comment in the press ... that we are not interested in taking on big cases. Well, we are - but we are interested in doing them in a different way in the future,’ he said.

Further reading:

SFO caseload increases in sea change

Read the Financial Times story

KPMG uncovers double govt payment to NIEC

AccountancyAge.com — 2008-09-04T08:56:00.000Z

AccountancyAge.com, Accountancy Age, Thursday 4 September 2008 at 08:56:00

A KPMG investigation into NIEC’s collapse uncovers a double payment from DCAL

A KPMG study into the collapse of the Northern Ireland Events Company (NIEC) discovered the government body received a double payment from the government by mistake before it folded, owing more than ₤1.5m.

Shortly before it collapsed in April 2007, NIEC received two payments of £317,842 in error, involving the Department of Culture, Arts and Leisure (DCAL), who funded the NIEC, and the Department of Education which processed payments, BBC News reports.

Although NIEC was already in financial difficulty at the time, DCAL agreed the company could keep the extra payment against future spending and only a month later, NIEC asked DCAL for further payments totalling £180,000.

The KPMG investigation into the double payment criticised NIEC's board of directors and DCAL alike for failing to properly monitor the government body.

Further reading:

Read the BBC News story

KPMG reviews three Olympic venues for viability

AccountancyAge.com — 2008-08-29T08:08:00.000Z

AccountancyAge.com, Accountancy Age, Friday 29 August 2008 at 08:08:00

KPMG has been brought in to evaluate three 2012 Olympic venues for their viability

The Department for Culture, Media and Sport (DCMS) has confirmed it has called in KPMG to review plans for the equestrian, shooting and basketball 2012 Olympic venues to see whether they will deliver value for money.

Plans are for the 23,000-seater stadium for equestrian events at Greenwich Park and the 7500-seat shooting facilities at the Royal Artillery Barracks in Woolwich to be dismantled after the games, BBC News reports.

The 12,000-seat basketball arena to be built in the main Olympic Park, which will only stage the qualifying rounds, has also been earmarked for relocation.

‘This is one of a number of reviews of Olympic venues to ensure they are being delivered as efficiently as possible and meet both games and long-term legacy requirements,’ a DCMS spokesman said.

Further reading:

Going for gold

Profession still unsure as Olympics heads for London

Read the BBC News story

Scots Trust must find £42m cost savings

Michelle Perry — 2008-08-22T10:06:00.000Z

Michelle Perry, Accountancy Age, Friday 22 August 2008 at 10:06:00

SNP ministers deliver 'significantly lower' budget to Scotland's largest health board forcing FD to find £42m in cost savings

The finance director for Scotland's largest health care trust said they would have to find cuts of £42m this year after receiving a reduced budget by SNP ministers.

Douglas Griffin, finance director of NHS Greater Glasgow and Clyde, attributed the shortfall on a 'significantly lower' budget and a higher than anticipated UK pay settlement.

Labour's health spokeswoman, Margaret Curran, MSP for Glasgow Baillieston, said: 'Nicola Sturgeon will not want to be remembered as the minister for health cuts, but this is the first sign the SNP's decision to put less money than Labour into health is starting to have an impact on services,' The Herald reported.

The Trust moved to allay any patient concerns over future healthcare confirming that the the cuts would not have an impact on patient care but would come from 'business restructuring and other efficiencies'.

Further reading:

Scotland's largest health board announces £42 million cuts

Personal insolvencies calm before storm, says profession

Rachael Singh — 2008-08-01T14:59:00.000Z

Rachael Singh, Accountancy Age, Friday 1 August 2008 at 14:59:00

Drop in personal insolvencies is the calm before the storm

Personal insolvency figures have taken a surprise fall, with the profession flagging up concerns over the latest numbers.

The Insolvency Service said that combined Individual Voluntary Arrangements and bankruptcies for Q2 had fallen by 2.0% on the previous quarter, and 8.3% on the same period last year.

The figures show that IVAs are down 3.2% on Q1 and 12.4% on the same period last year. Similarly bankruptcies were down 1.3% on Q1 and 5.7% in comparison to Q2 2007.

Louise Brittain, national bankruptcy partner at Baker Tilly, admitted surprise at the latest numbers: 'I am surprised at the results. I think there is probably a lag coming between corporate insolvencies and personal.'

She added: 'I am willing to put money on it that the figures will rise by the end of the year and would be seriously concerned if it didn't. At that point we would need to look very hard at the reasons why they haven't increased.'

Insolvency professionals suggested IVAs were declining because creditors were no longer voting in favour of IVAs, instead pushing for debt management plans.

Mark Sands, director of personal insolvency at KPMG said: 'Our research shows that only 25% of new IVAs are taking advantage of the new approach (IVA Protocol) and that 17% of IVAs put forward in the last quarter were rejected. These and other factors have contributed to IVAs actually falling in the most recent quarter by 13% compared to a year ago.'

Due to the spiralling cost of energy, high interest rates and consumers finding it difficult to remortgage their homes to free up equity, insolvency figures were expected to rise before the end of the year.

Mike Gerrard, personal insolvency partner at Grant Thornton said: 'An increasing number of individuals will become insolvent as a result of these tough times, but it will be from a steady build up of financial pressure which turns controllable debt into unmanageable debt.'

'Black Wednesday occurred in September of 1992, but personal insolvencies following that event were felt in Q4 of that year and in a big way in Q1 1993. Likewise, I expect to see a rise in personal insolvencies later this year, but particularly in Q1 2009 when the cumulative effects of rising costs and debt woes are given an extra push over the precipice by Christmas spending,' he added.

Further reading:

Insolvency drop is a false dawn, says PwC

Insolvency practitioners shying away from IVAs

Insolvency stats miss full scale of debt, claim practitioners

Bacon pans HMRC's'sketchy' £11.5bn savings plan

David Jetuah — 2008-07-17T17:59:00.000Z

David Jetuah, Accountancy Age, Thursday 17 July 2008 at 17:59:00

Revenue's transformatiom programme too reliant on best case scenario estimates says PAC firebrand

Richard Bacon has panned the taxman for using 'sketchy and volatile' estimates to arrive at a target of £11.5bn of savings when its transformation programme is completed.

The Public Accounts Committee member's comments came in response to an NAO progress report on the Revenue's efficency drive.

'The report could not be clearer: a programme of this size and complexity needs realistic planning. If the mandarins at HMRC think using sketchy and volatile estimates is the way to drum up serious savings, they need to get real. '

HMRC has kicked off the £2.7bn project, aiming to make about £11.5bn of savings from an increase of £6.3bn in the tax yield and more than £4bn of transaction savings, but the MP said that the taxman had been too optimistic in its calculations.

'The estimates are based on the increased tax yield being collected in full and transaction savings which have not been validated yet. This is hardly solid ground for a multi-billion pound savings drive.'

Further reading:

Visit the NAO website to read the report

LDA inept rather than corrupt, audit verdict

AccountancyAge.com — 2008-07-17T07:50:00.000Z

AccountancyAge.com, Accountancy Age, Thursday 17 July 2008 at 07:50:00

LDA’s ‘massive’ misspending was ineptitude rather than corruption is the verdict of damning audit report

A damning report into the London Development Agency (LDA) released yesterday by the Forensic Audit Panel says the tens of millions of pounds of public money squandered by the agency was the result of ineptitude rather than corruption.

The report, which also raises the prospect of a similar investigation into Transport for London, calls for the LDA to be stripped of its role in the 2012 Olympics and for £8m of cuts across the Greater London Authority, according to the Evening Standard.

‘Our investigations have left us in no doubt that money has been misspent on a massive scale, say tens of millions,’ Patience Wheatcroft, head of the audit panel, said. ‘We're of the view that it was ineptitude rather than corruption that was the biggest blight on the LDA.

She said the panel had been ‘very nervous’ when looking at allegations of misspending by former London mayor Ken Livingstone's former race and policy adviser Lee Jasper as they were being investigated by police.

Further reading:

Livingstone refuses to appear before audit panel

Read the Evening Standard story

Transparency International-USA slams SFO

Penny Sukhraj — 2008-07-07T09:54:00.000Z

Penny Sukhraj, Accountancy Age, Monday 7 July 2008 at 09:54:00

The SFO's termination of the high-profile investigation into foreign bribery allegations against BAE Systems cast doubt on its 'commitment' to fighting corruption

The UK's fraud office has been slammed for failing to bring to court foreign bribery cases.

Nancy Boswell, the president and chief executive of Transparency International-USA, was commenting on the Serious Fraud Office in a letter to the FT.

Boswell said the SFO's termination of the high-profile investigation into foreign bribery allegations against BAE Systems cast doubt on its 'commitment' to fighting corruption.

'Against that backdrop, the Serious Fraud Office's consideration of the US approach to confronting foreign bribery can be worthwhile if properly adopted,' she said.

She suggested the SFO consider 'deferred prosecution agreements' as a tool when dealing with companies.

'Far from letting companies off lightly, such agreements generally require companies to admit any wrongdoing, pay stiff penalties, co-operate in ongoing investigations (which can lead to criminal prosecution of individuals), and – vital to future prevention – to implement anti-bribery compliance programmes and engage an independent compliance monitor for up to three years to ensure implementation and to report back to the government on its findings,' she said.

Further reading:

SFO wants plea-bargain system for bribery cases

SFO chief faces fresh round of criticism

Fight against corporate crime under threat

SFO's weaknesses detailed in De Grazia review

MPs shoot down expenses overhaul

David Jetuah — 2008-07-04T10:19:00.000Z

David Jetuah, Accountancy Age, Friday 4 July 2008 at 10:19:00

Members of Parliament vote not to have their expenses put under the spotlight by auditors

The MPs expenses storm has taken a new twist as members knocked back a move to have their expenses put under the spotlight.

MPs shot down moves to have their allowances vetted by forensic auditors, despite serious criticism from the public on the issue.

Members also voted to keep the £24,000 a year budget to buy and furnish second homes as they refused to shift their stance on expenses.

The expenses regime at Westminster has caused controversy recently as members faced a raft of criticism for their spending habits.

Further reading:

NAO issues MP expenses clampdown warning