Ministry of Defence finances under fire

Ministry of Defence finances under fire

The Ministry of Defence has been condemned for poor financial controls which led to millions of pounds of losses and excess expenditure, poorly-managed computing projects and fraud.

The House of Commons Public Accounts Committee said this was ‘clearly unacceptable’.

The all-party group was alarmed but suspense accounts still contain unreconciled balances. It said this was ‘unacceptable’.

It added: ‘A rapid resolution of the remaining problem accounts is now required if Parliament is to place reliance on the resource aAccounting produced by each department.’

The PAC was also alarmed that an employee in the Glasgow-based Pension Division of the Army Personnel Centre defrauded the MoD of £447,000. He has since been imprisoned. So far the MoD has recovered £48,000 from him and is seeking more High Court action.

The PAC said: ‘A lack of awareness among staff has to fundamental accounts procedures, and weaknesses in password control, allowed the fraud to continue undetected for over a year.

‘No single individual should be able to complete all stages of the payment process. Segregation of the organisation of the payment function is a fundamental control. The department must dissimulate to their management of staff the lessons learnt from this case without delay.’

The PAC also condemned the loss of almost £40m in two failed information technology systems.

Overall the MoD exceeded its expenditure limits by £37m and had to seek retrospective approval from parliament to make up the deficit.

PAC, took ‘a very serious view’ of this especially as the MOD ‘had incurred unacceptable expenditure every year for the past 4 years’. The MPs said: ‘This is clearly unacceptable’.

PAC chairman David Davis said: ‘This report raises serious doubts of financial management in the MoD. The MoD’s ill-considered attempts to develop bespoke IT systems and its inadequate system of control have led directly to significant losses of public funding. Taxpayers have a right to expect much better stewardship of their money’Mr. Davis added that in future the MoD should recognise the high risk of developing bespoke IT systems and give, considerable consideration’ before authorising anymore in the future.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource