Accounts at the Lord Chancellor’s department have now been qualified for nine years running and were described by one NAO official as a ‘perennial problem’.
The department’s key difficulty is inability to gain enough evidence that £633m of legal aid payments complied fully with regulations.
Qualification of the accounts was also made because the department exceeded by £1.14m its limit on running cost expenditure because rent paid in 1997-98 was not accounted for until 1998-99.
The NAO found the Serious Fraud Office has overspent by £0.7m. Excess expenditure of £0.1 was also found as a result of costs awarded against the department when the courts quashed search warrants obtained in connection with assistance being provided to an overseas government.
Receipts, which may have offset expenditure, were short by £0.6m as a result of a misinterpretation of the proper accounting treatment for VAT on contracted out services.
Sir John Bourn, head of the NAO, said: ‘The Lord Chancellor’s Department has clearly made significant progress towards improving the checking of criminal legal aid applications though more remains to be done.
‘I am disappointed however, to have to report the financial control weaknesses in the Lord Chancellor’s Department and the incorrect accounting treatment by the Serious Fraud Office meant that both departments have exceeded the funds granted by Parliament and had to ask for further parliamentary authority to approve their expenditure.’
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