NAO praises improvements in government

Standards of accountability and probity within government departments have been improved, according to the National Audit Office.

Reforms to improve the standard of book-keeping among government departments appear to be paying off. Sir John Bourn, head of the NAO, said that departments were making good progress in improving the quality of their accounting.

In particular, Sir John said that accounts and their timeliness had improved, leading him to issue qualified opinions on only four sets of accounts, as opposed to eight last year.

Only two departments failed to submit their accounts by the statutory deadline of 30 November, compared with 11 in 2002/03.

The news came as the Treasury announced changes to improve the level of financial control through a project spearheaded by the head of government accounting, and former Accounting Standards Board chairman, Mary Keegan (pictured). From December 2006, all government departments must have qualified accountants as board-level finance directors.

Sir John issued qualified opinions on four sets of accounts this year – the Department for Work & Pensions, Customs & Excise, the Teachers’ pensions scheme and the NHS pensions scheme.

The watchdog has found reason to qualify the DWP’s accounts for 15 successive years, in the light of ongoing errors in benefits payments. Customs was also criticised by the NAO for failing to recover some £650m lost in alcohol-related fraud.

The NAO also warned that many departments were still falling short on the Treasury’s ‘faster closing initiative’ – the acceleration of production and audit of resource accounts in order to lay audited accounts no later than four months from the end of the financial year.

It said that improvements to financial management have become increasingly urgent in the wake of the Gershon review, the attempt by the government to find efficiency savings in Whitehall.

‘There is now general recognition of the key role that financial management has to play in the efficient use of resources and in the delivery of efficiency programmes,’ Sir John said.

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