The National Audit
Office (NAO) has qualified the accounts of the
and Human Rights Commission for the second year running and warned
it faces “serious and continuing risks to its ability to manage properly its
Comptroller and auditor general Amyas Morse cited “irregular expenditure in a
number of areas” in one of the NAO’s most damning verdicts on the performance of
a non-departmental public body.
The most serious breach of accounting rules involved single tender
procurement actions involving sums of more than £50,000 without government
approval and “serious failings” in procurement activity.
The Commission also “unintentionally” breached pay limits agreed with the
Treasury, with average rises of 6.89% against a maximum of 4.8%, incurring a
financial penalty of £500,000.
The previous year the new Commission’s accounts were qualified over the
re-engagement of former employees of the Commission for Racial Equality on
short-term contracts with irregular expenditure of over £300,000 without the
requisite Treasury authority.
In 2008-09, besides the pay rise irregularities, the Commission was unable to
obtain assurances over the spending of £63,000 in grants to promote equality
related activities. Many of the recipients had “ceased to exist”.
Documentation for the procurement of goods and services was inadequate or
Morse’s report said: “I am concerned that the scale of these systemic
weaknesses reflects a culture of inadequate forward planning in the Commission,
a lack of focus on compliance with procedures and insufficient review and
oversight of expenditure by the senior management of the organisation.”
He welcomed “immediate and significant changes” that have been made to the
Commission’s processes, with action to ensure staff understand the rules and
comply with them. The Treasury has stepped in to improve financial management
and nine new commissioners have been appointed.
Neil Kinghan, director general of the Equality and Human Rights Commission,
“I regret that the Commission made mistakes in its first eighteen months and
accept the NAO’s decision to qualify our accounts as a result. But I welcome the
NAO’s recognition of the “immediate and significant changes [the Commission] has
made to improve its procurement processes”.
“These accounts relate to the financial period ending in March 2009. Since
then the Commission has made significant changes to its senior management team
including a new director general and new finance director”
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