Treasury ignores NAO

The Treasury will push ahead with the switch to resource accounting, despite National Audit Office recommendations to delay the move. Andrew Likierman, Treasury director of financial management, reporting and audit- ing, told the Public Accounts Committee, this week that the switch to full-blown resource accounts was ?on schedule?.

The Treasury and the NAO are thought to be split over government department readiness for the switch from cash to accruals accounting. But Likierman dismissed reports that government departments had fallen behind schedule, and David Davis, chairman of the PAC, said he was encouraged by Likierman?s ?evangelical enthusiasm?.

The Treasury confirmed all departments could start the resource accounting parallel dry-run by the end of the financial year. Reports that the departments of environment, transport, regions and the ministry of defence were unlikely to meet the deadline were rejected by Likierman.

?We?ve introduced three trigger points to check if departments are reaching targets. We?ll progress on the basis that departments pass the trigger points,? he said.

But Sir John Bourn, head of the NAO, has urged a year?s delay to reduce the risk of fraud and theft and minimise confusion. Likierman admitted the systems could be delayed, but said he expected to go live by the scheduled date of 2001/2002.

?The new system is more sophisticated than cash accounting, and we intend to ensure departments don?t slacken on crucial training. The training won?t require a huge external programme and the information that will come out of resource accounting will make government accounts more transparent,? he said.

PAC DEMANDS FOREIGN OFFICE CLEANS UP ACT The Foreign Office was this week ordered to tighten internal audit procedures after being condemned for lax controls which allowed two accountants at the same embassy to steal more than #400,000.

The Public Accounts Committee told it to eradicate the culture in its department which regards financial management as a second-order activity. The PAC was ?astonished? how a locally employed accountant defrauded the British Embassy in Amman, Jordan, of at least #109,000 over five years, less than 12 months after it heard how his predecessor had misappropriated #333,000. It condemned the authorising of handwritten invoices and cash transactions.

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