PracticePeople In PracticePAC thumbs-up for National Savings

PAC thumbs-up for National Savings

National Savings has secured unqualified audit approvals across their product range for the first time ever.

The achievement, which was recorded in a Public Accounts Committee report, signalled approval of the way in which the Treasury-backed financial body has handled the start of a 15-year £150m partnership, with its services contractor Siemens.

This was in sharp contrast with the computerisation fiascos of the home offices’ immigration and nationality departments and the passport office which also involved Siemens.

The current report contrasted sharply with the watchdog committee’s penchant for hard-hitting criticism, stating: ‘The partnership appears to be good value for money.’

The 1999 PAC report on National Savings highlighted accounting problems relating to uncertainties over the precise liability to investors.

This was due to differences in the amount disclosed in the financial accounts and those calculated by adding up customer account balances; unexplained balances between products; irreconcilable discrepancies between National Savings and agents like the post office; and large unexplained suspense account balances.

The report said the National Savings lacked sufficiently trained or qualified financial staff and sounded the alert over the ‘potential for fraud from weaknesses in the control systems’.

In an early report in 1997, the PAC concluded that the number and size of the discount and irreconcilable balances which existed in National Savings’ financial accounting system were unacceptable and complained that there was ‘a risk’ of fraud.

However according to the most recent PAC report: ‘National Savings told us that it had resolved historical cost accounting differences, reconciliations were up to date and, for the first time ever, a set of product accounts had been prepared for 1998/99.

‘These accounts had received an unqualified certificate from the comptroller and auditor-general.’

Complaints to the CAG date back to the 1993/4 accounts. National Savings has spent £2m trying to resolve differences going back many years, resulting in an overall net deficit of nearly £5m.

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