PracticeAuditOlympic land-buying agency criticised for poor quality accounts

Olympic land-buying agency criticised for poor quality accounts

London Development Agency must improve its finanicial management, warns Audit Commission

Auditors have qualified the value for money statements issued by the London
body in charge of buying land for the Olympic Games, and criticised it for the
poor quality of its draft accounts.

The
Audit
Commission
has qualified the 2008/2009 value for money and
resources statement of the
London Development
Agency
, after a high profile
£159m
overrun
in its budget for acquiring land for the London Olympics in
2012.

The commission criticised the agency for failing to put in place adequate
arrangements to understand its costs and performance and achieve efficiencies in
its activities.

It also failed to produce relevant and reliable data and information to
support decision-making and manage performance, said the auditor.

“The scale of failings identified has had a significant impact on the
agency’s funding of future programmes and on its reputation,” said the annual
audit letter.

Although steps had been taken to address auditors’ concerns over the quality
of the agency’s accounts from 2007/2008, “these have proved to be not sufficient
“, the auditor added.

“A large number of errors were evident in the draft financial statements, a
number of which were material, and the opinion audit was therefore protracted,
as it was last year.

“I was eventually able to issue an unqualified opinion on the accounts on 20
November 2009, but this was sometime after the 30 September deadline.”

The agency has undertaken a review of its finance function, said the
auditor’s letter.

It had also made improvements to its internal controls.

“The Audit Commission recognises that our revised systems have enabled the ne
w leadership of the LDA to respond swiftly to deal with the issues raised by the
Commission,” said the LDA in a statement.

“The Audit Commission’s judgment on the management of finances is based on
our discovery of additional future liabilities in our Olympic Land Directorate
earlier this year. We are implementing the recommendations made both by the
Commission and by KPMG, following their recent inquiry into our Olympic Land
Directorate.

“We are taking action to improve the LDA’s finance function. We have
restructured responsibilities so there is now a dedicated group director finance
to provide more focus to the finance function, and an increased focus on the
management of the agency’s finances.”

Further reading:

Non-qualified
accountant oversaw £160m Olympic overspend

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