The Ministry of Defence has been strongly criticised by the Public Accounts Committee (PAC) for exceeding its budgets in three different areas.
The MoD overspent by more than #1m on operational and support costs, by more than #171m on logistics services, and by more than #22m on systems procurement and research.
It is the second year running in which operational and support costs have gone over the prescribed budget.
Condemning the MoD’s performance as ‘not satisfactory’ the PAC called for more effective forecasting, profiling and monitoring arrangements, better management information, and more effective communication between budget holders, spending departments and the central finance staff.
The MoD promised new financial and accounting systems currently being put in place – to coincide with the introduction of resource accounting – will enable it to meet the PAC’s demands.
But this promise has doubts cast on it by a recent report published by the National Audit Office which said it would not have the new systems ready for the 1 April deadline to make a dry run of the government’s resource accounting regime.
The PAC welcomed the fact the total number of overspent budgets had gone down from seven in 1995/1996 to three in 1996/1997.
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