Senior accountants at the Ministry of Defence were accused of persistent financial mismanagement of public funds by the Public Accounts Committee, after admitting they were unable to account for a #246m overspend.
A report published by the National Audit Office said the size of the 1996/1997 overspend proved a fundamental breakdown in financial management and control.
The MoD admitted it did not know if the unauthorised overspend was due to incompetence or fraud, and no disciplinary action had been taken for the errors.
MoD chief accountant Sir Richard Mottramby and procurement accountant Sir Robert Walmsley blamed incorrect expenditure forecasting for the massive overspend and said they did not realise they had exceeded the budget.
‘We made every effort not to overspend but forecasting is intrinsically quite a difficult and complicated thing to do. We are trying to get a better handle on how we can forecast the rate at which money goes through the door,’ said Mottramby.
But committee members accused the MoD of complacency and indifference to its accounting problems and said it showed a blatant lack of concern for public accountability.
Committee chairman David Davis said it was apparent the MoD had problems with accounting in general and demanded assurances there were management practices now in place to avoid similar problems.
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