PracticePeople In PracticeAlarm raised over public sector’s readiness for new accounting regime

Alarm raised over public sector's readiness for new accounting regime

The powerful House of Commons public accounts committee has issued a public warning that government departments may not be ready for a massive shake-up of accounting procedures.

MPs have voiced their concern ‘that the available evidence suggest that a large number of departments are experiencing considerable difficulties with their ‘dry-run’ resource accounts.’

The committee revealed that because of delays submitting a shadow resource accounts, the national audit office was able to audit only six of 53 by the Treasury deadline and only 14 by the end of 1999 – four of which had to be qualified.

The MPs welcomed an assurance from Chief Secretary Andrew Smith that he has not ruled out keeping existing cash accounts going and ‘that the government will not discontinue the existing form of appropriation accounts without the agreement of this committee.’

The warning came in a report from the committee which berated Treasury ministers for refusing to extend the Governments Resources and Accounts Bill to guarantee the comptroller and auditor general Sir John Bourne the right to follow tax payers money wherever it is spent.

They welcomed the trend of the governments appointing him external auditor to all bodies established since 1997.

But they said: ‘We find it unsatisfactory that UK companies’ regulations prevent the C & AG from auditing those Executive non-departmental public bodies that have been established has limited companies.’

The MPs said the government had claimed Euro directives to not allow the regulations to be changed, but they noted state audit offices in most EU member states do audit limited companies and they secured an undertaking from Smith to consider the legislation.

The report came out after most of their demands for changes to the Bill to expand and underwrite the C & AG’s powers and the rights of Parliamentary scrutiny were flatly rejected by Treasury ministers who used the in-built Labour majority on the committee debating the Bill to stomp on PAC-ammendments.

MPs to question whether Treasury should be looking after nation’s finances

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