II. RESOURCE ACCOUNTING
6. The Department's memorandum[5]
sets out the history of the implementation by the Northern Ireland
Office of RAB. At the same time as this was submitted, the Department
sent us the 'dry run' Resource Accounts for 1998- 99 and 'dry
run' resource based Estimates for 2000-01, together with an illustrative
commentary.[6]
7. We are grateful to the Northern Ireland Office
for supplying this material. We were pleased to note that the
1998-99 accounts had enabled the Principal Accounting Officer
to offer assurances to the Treasury that the department remained
on track to produce resource accounts for 1999-2000 capable of
withstanding audit[7]
and that the informal audit opinion from the Comptroller and Auditor
General on the 1998-99 resource accounts concluded that no substantive
issues of concern arose. The Northern Ireland Office commented
thus:[8]
"Any issues which were
identified by the NAO during their audit work do not have a significant
impact on the department's introduction of RAB in accordance with
the planned timetable. The issues identified are being addressed
by the department and, where appropriate, changes to procedures
and/or systems are being put in place and will ensure further
improvements leading to better quality 'dry-run' accounts in 1999-2000
and a clear audit opinion for the 2000-01 accounts."
8. In the oral evidence session, the witnesses helpfully
clarified a number of matters relating to the detail of resource
based estimates and accounts and the control mechanisms in particular.[9]
They also explained that four of the five Requests for Resources
in essence reflect the broad functional areas of responsibility
of the Northern Ireland Office,[10]
with the fifth, which constitutes the bulk of the overall resources,
representing the transfer to the Northern Ireland Consolidated
Fund. The witnesses told us that the detail lying behind this
estimate was a matter for the devolved administration.[11]
9. In the event, progress in preparing the formal
resource accounts for 1999-2000 was not as smooth as had been
initially anticipated by the Northern Ireland Office. These, like
those of other departments, were due to be laid before Parliament
by 31 January 2001, to enable departmental committees to scrutinise
them, if they so wished, before the Vote on Account for 2001-02
was put to the House.[12]
For this reason, special arrangements were made to defer the cut
off date for the Vote on Account to be considered.[13]
10. When the accounts did not appear by 31 January
2001, we sought an explanation from the Northern Ireland Office.
This revealed that three areas of difficulty had emerged after
discussion with the auditors which, if not resolved, would have
been likely to have led to the accounts being qualified.[14]
These were:
- the need for a full review of capitalisation
policy following the identification of inconsistencies in the
1998-99 'dry run' account;
- difficulty in extracting accurate accruals data
quickly from the Northern Ireland Office's systems; and
- the absence of key members of staff with the
necessary accountancy skills.
The last two points are being addressed as part of
a review of the Northern Ireland Office's accountancy function.
11. A new timetable for the completion of the accounts
was applied which required the audited accounts to be laid before
the House by 31 March 2001. The Votes and Proceedings formally
recorded their laying by the Department on 30 March as Cm 5058.
This involved the provision of two typescript copies to the Journal
Office, which were subsequently delivered by that Office to the
Library. Copies were not generally available in the Vote Office
until 27 April, some four weeks later.[15]
12. Although the technical minimum formal laying
requirement was met by 31 March, we do not consider that the Northern
Ireland Office, like a number of other departments, complied in
practice with the spirit of the requirement to lay these accounts
by 31 March 2001. We regard it as unfortunate that the material
difficulties with these accounts were not identified earlier,
with the result that their completion was significantly delayed.
As a result, we were deprived of any opportunity to look at the
accounts before the Vote on Account for 2001-02 had to be agreed
by the House. We also regret that, given the prior interest we
had displayed in the development of resource accounting, the Department
was not pro-active in informing us of the difficulties it encountered
subsequent to the evidence session, but left us to take the initiative
in this matter. If a similar situation arises in future, we hope
the Department will take the initiative and explain the problem
and its proposed solution.
13. These criticisms notwithstanding, we congratulate
the Northern Ireland Office on producing resource accounts for
1999-2000 that have received on unqualified opinion from the Comptroller
and Auditor General. Not all departments have achieved this.[16]
5 Ev. p. 1. Back
6 Ev.
p. 3. Back
7 Ev.
p. 1. Back
8 Ev.
p. 2. Back
9 See
Q 6 to 30. Back
10 Q
5. Back
11 Q
23. Back
12 See
paragraph 119 of the Memorandum from HM Treasury to the Treasury
Committee, submitted on 22 January 2000. This was published by
the Treasury Committee as HC 308-i (1999-2000); see p. 14. Back
13 The
Vote on Account for the coming financial year is normally agreed
by the House not later than 6 February (see Standing Order No.
55), typically in the preceding December. For the Vote on Account
for 2001-02, the House agreed to defer the cut-off until 18 March
2001; see Official Report, 27 February 2001, Vol. 363, Cols. 854
to 876. The Treasury proposed such a deferment in February 1998,
to allow Parliament an additional three months to scrutinise departments'
1999-2000 resource accounts before voting Supply on a resource
basis for the first time. See HC 308-i (1999-2000), p. 14, paragraph
119. Back
14 Appendix
1, p. 26. Back
15 See
also Appendix 2, p. 27. Back
16 See,
for example, Cm.5055 and Cm. 5057. Back
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