BusinessCompany NewsMoD rejects MPs’ auditing demands

MoD rejects MPs' auditing demands

Defence chiefs have flatly rejected a Public Accounts Committee demand that they account for the entire and not the marginal expense of exercises by the armed forces.

Link: MPs warn of weakness MoD stocks

The committee insisted, after examining Exercise Saif Sarea II in Oman last year, that exercises were a crucial means of maintaining military capability ‘and the full cost or resources consumed should be taken into account and balanced against other calls on the Defence budget’.

But the Ministry of Defence said decisions on resource options for activity ‘are based on net additional costs, which provide a common comparator with operations and other military activity’.

A Treasury minute replying to the PAC said: ‘Identification of full costs would not, in the view of the Department, improve the process of establishing the cost-effectiveness of an activity. It would also be very costly and time-consuming to produce.’

The MoD claimed the Treasury agreed to this accounting treatment of exercises in 1999.

The committee’s report accused the MoD of using false accounting logic, which priced the cost of sending planes on the exercise half way round the world considerably less than using tanks.

The clash follows the MoD’s shock discovery that under resource, instead of cash accounting, scrapping Harrier jets earlier to make a saving actually resulted in overspending in the year concerned because the value of assets was being written off sooner than expected.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor