NAO qualifies over half of Whitehall accounts

The 1998/99 resource accounts of 30 departments – out of a total of 52 – were qualified by the National Audit Office, Andrew Likierman, head of the Government Accountancy Service told MPs on the Public Accounts Committee last week.

And in a private memo to committee members Likierman predicted some of the 30 would still not receive clean audit opinions during the next ‘dry-run’ – although some would be qualified for minor reasons.

He told MPs that for 1999/2000 between nine and 15 departments would be qualified, for 2000/2001 between three and eight, and for 2001/2002 up to five departments could still have their accounts qualified.

The Home Office, the Department of Social Security and the Department of Health are likely to remain qualified in 2001/2002, the committee was told.

Of those that were qualified this time around, there were three ‘nil opinions’ where comptroller and auditor general Sir John Bourn was unable to form and audit opinion because the accounts concerned were not substantial enough.

If departments were still struggling after the dry run had ended, Sir John said ‘hit squads’ may be sent in to complete accounting procedures.

Likierman told the influential committee the three were GCHQ, the Health and Safety Executive and the Treasury Solicitor’s Department. He cited that the newness of the methodology and continuing problems applying commercial accounting procedures to central government as reasons for the slow progress.

But he reminded MPs that the reason for implementing a test run of the new approach was for departments to iron out difficulties before resource accounting went live.

Additionally, Likierman said a lack of experienced staff had presented departments with problems, which they had since addressed.

The National Audit Office has prepared a report for the PAC which was presented at a hearing last week. The Treasury has asked the committee to present its decision on the progress of the work by the Summer recess at the end of July.

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