PracticeConsultingNAO qualifies board accounts

NAO qualifies board accounts

Staff at the body responsible for administering #4.2bn of agricultural spending could be in the firing line, after a catalogue of errors in the implementation of a new accounting system.

Sir John Bourn, Comptroller and Auditor General, qualified the accounts of the Intervention Board Executive Agency because his staff at the National Audit Office could not match the account balances in the organisation’s general ledger with the totals in many of the subsidiary accounting records.

A total of #31m could not be reconciled.

The NAO discovered a lengthy list of problems at the Intervention Board’s accounts department, mostly relating to the start-up of a new ‘integrated’ accounting system.

Bourn said: ‘The Intervention Board needs to address its management and control procedures operating round the integrated accounts system, and may need to re-assess the structure and staffing of its accounts section.’

Phases one and two of the implementation of the new accounts system took much longer than anticipated, and the original ‘go-live’ date had to be delayed by a month. One of the consequences of this delay was to increase the cost of phases one and two from an anticipated figure of #2.5m to a total of #6.6m.

Even after the new system was in operation, the board reported persistent problems. The daily transfer of transactions from the accounts payable to general ledger took over 40 hours to complete in the second and third months of the new system, resulting in the general ledger falling behind the reported accounts payable position. In addition, software problems delayed the posting of receipts into the general ledger for three months and led to transactions being posted to incorrect accounting procedures.

The inexperience of the staff is mentioned several times in the NAO report.

The board had to recruit an external consultant to take a close look at the problematic accounts receivable processes. External consultants have also been asked to train the board’s staff so they can take ‘responsibility for reconciliations.’

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