PracticeConsultingAudit – MoD expenditure is off target.

Audit - MoD expenditure is off target.

The Ministry of Defence has had its accounts qualified by the National Audit Office after the discovering of an army pension fraud worth nearly half a million pounds, the loss of almost £30m on IT projects and an overspend of £37m. The staggering figures were revealed in a report published on Wednesday which saw the MOD accounts qualified for the third year in succession. The fraud involved a single civil servant working in the Pensions Division of the Army Personnel Centre, Glasgow. He allegedly transferred cash into personal accounts using the details of army personnel. The total amount involved came to £470,000 of which only £48,000 has been recovered. The most shocking element of the accounts for 1998/99 involved the scrapping of software to run an RAF communications system. The project began in 1989, to be completed by 1994, at a projected cost of £10.2m. By 1997 however, the software, known as the Common User Data System, was still not fully operational and was scrapped with £21m written off. A new off-the-shelf system costing £1.3m is now being implemented. A failed Navy IT project added £8.7m to the overall bill. Operational and support costs ran over budget by £36m and defence logistics by £700,000 prompting plans to request more funds from parliament – the seventh time in ten years spending has exceeded expectations. A statement from the NAO said the MOD had worked hard to achieve ‘better control’ over expenditure and had even made improvements. But Sir John Bourn, comptroller and auditor general at the NAO, concluded the report saying there was still ‘serious weaknesses’ in financial management and control, and ‘further improvements’ needed at the MOD.

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