PracticeAuditMoD accounting under fire

MoD accounting under fire

The Ministry of Defence has been accused of using false accountinglogic which priced the cost of sending planes on a major exercise halfway round the world at considerably less than using tanks.

Link: More misery for MoD over accounts

The criticism came from the Commons Public Accounts Committee in areport on Exercise Saif Sareea in Oman – just before the US attack onOsama Bib Laden and Afghanistan last year.

MPs complained the Ministry of Defence costed the deployment on thebasis of additional or marginal costs – including transport costs andthe extra costs of using equipment – but excluded the salaries and wages ofthose taking part.

The report said : ‘To cost exercises on this basis gives only a partialview, and can also give rise to inconsistencies between the threeservices.’

The RAF excluded the cash costs for aircraft transit and aviation fuelwhile the army included the cost of operating armoured equipment throughcalculated rates for track mileage – which meant ‘sending aircraft onan excercise costs little while sending armour is very expensive’.

The report said that such exercises were a crucial means of maintainingmilitary capability ‘and the full cost of resources consumed should betaken into account and balanced against other calls on the DefenceBudget’.

The PAC said decisions – including classifying the climate as if it wereEuropean instead of having very high temperatures and not to spend extrafunds on desert-proofing tanks and guns – were taken against abackground of severe pressure on the excercise budget, which wasoverspent by £26m.

The committee also complained a lack of equipment accounting proceduresmeant the MoD had no idea how many assets went from Oman to Afghanistanduring and after the excercise and whether or not they were everreturned to the UK.

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