APPENDIX 5
Supplementary memorandum submitted by
HM Treasury
RESOURCE ACCOUNTING: 1999-2000 ACCOUNTS
INTRODUCTION
The PAC's 29th Report, Session 1999-2000: Progress
on Resource Accounting and the Adoption of Resource-Based Supply[33]
requested that the Treasury provide the Committee with a report
on the quality of departmental resource accounts for 1999-2000.
In its response[34],
the Treasury undertook to do so, and this Memorandum discharges
that undertaking.
1999-2000 RESOURCE
ACCOUNTS
Overview
Fully audited resource accounts were published
for the first time for the financial year 1999-00, following a
dry-run for 1998-99. A total of 49 resource accounts were scheduled
to be produced in accordance with an Accounts Direction issued
by the Treasury[35]
under section 5 of the Exchequer and Audit Departments Act 1921.
A full list of 1999-2000 resource accounts is at Annex A.
Of the 49 resource accounts, 39 have been prepared
in accordance with an Accounts Direction. The Direction required
the preparation of accounts for 1999-2000 on a statutory basis,
with an audit by the Comptroller and Auditor General and a deadline
of laying the accounts before the House of Commons of 31 January
2001. All these accounts were laid by the statutory deadline.
Dispensations from an Accounts Direction
A further 10 bodies (highlighted in Annex A)
were given dispensations from having to follow an Accounts Direction
for 1999-2000, although they were still required to prepare resource
accounts, to be audited by the Comptroller and Auditor General
on a non-statutory basis. Dispensations were granted by the Treasury,
having consulted the National Audit Office, for those bodies which
had particularly significant issues in their ability to submit
accounts—within the statutory timetable—signed by
the Accounting Officer to the Comptroller and Auditor General
which gave a true and fair view. The dispensations were granted
on the basis that the additional time these bodies would have
to prepare their accounts would help them to make progress in
resolving outstanding issues and improve the quality of the accounts.
All these accounts were required to be presented to Parliament
by 30 March 2001 and this deadline was met for all accounts, except
those of the Single Intelligence Vote (SIV) which were presented
on 4 April.
Annex B to this memorandum contains details
of the reasons for the dispensations given to all 10 bodies, as
well as an assessment of the impact that the additional time to
prepare the accounts had on their quality. In general, the extra
time allowed by the dispensation has had a positive impact on
the quality of accounts. For a number of bodies, however, some
major challenges still remain, although action plans are in place
to resolve them.
Qualified Accounts
The Comptroller and Auditor General's Financial
Auditing and Reporting: 1999-2000 General Report[36]
noted that a total of 30 bodies[37]
had not received an unqualified "informal" audit opinion
on their 1998-99 dry-run accounts. For 1999-2000, there has been
a significant improvement, with a total of 12 bodies not being
given an unqualified audit opinion. The table below compares the
overall position for 1998-99 and 1999-2000:
| Audit Opinion |
1998-99 | 1999-2000
|
| Unqualified | 22 | 37
|
| Qualified (scope limitation/disagreement) |
18 | 9 |
| Adverse opinion | 5 | 0
|
| Disclaimer | 4 | 3
|
| "Nil" opinion[38]
| 3 | 0 |
| | |
Annex C to this memorandum contains details of the
reasons for the expressions of audit opinion for all 12 bodies,
as well as an update of the action plan summaries provided with
the December memorandum on anticipated progress.
ARRANGEMENTS FOR
2000-01
For 2000-01, the Treasury has issued a single Accounts Direction
under Section 5 of the Exchequer and Audit Departments Act 1921,
covering all departments. [39]The
Treasury has informed departments that it does not intend to grant
any dispensations from this Direction. This will require all resource
accounts to be signed and submitted for formal audit by the Comptroller
and Auditor General by 30 November 2001 and be laid before Parliament
by the statutory deadline of 31 January 2002.
CONCLUSION
Progress on resource accounting is being maintained in line
with the evidence reported to the Committee for its 29th Report,
Session 1999-2000 and the safeguards referred to in that Report
for 1999-2000 have ensured that the process as a whole has not
been affected. [40]That
said, the Treasury is aware that there are still various risks
and constraints, as referred to in the Committee's Report. The
Treasury, therefore, will continue to closely monitor progress,
and will liaise with departments and the National Audit Office
to maintain the required level of progress. As noted in the December
memorandum, the Treasury expects to see further improvements in
2000-01.
David Loweth
Head of Central Accountancy Team
HM Treasury
April 2001
33
HC556, 1999-2000. Back
34
Treasury Minute on the 27th and 29th to 37th Reports of the Committee
of Public Accounts, 1999-2000 (Cm 4901). Back
35
This excludes four Welsh bodies (Auditor General for Wales, Estyn,
Forestry Commission (Wales) and the National Assembly for Wales),
the accounts for which were laid before the National Assembly
for Wales. It also treats the Single Intelligence Vote as one
resource account covering the three intelligence agencies (GCHQ,
the Secret Intelligence Service, and the Security Service). Back
36
HC25-XIX, Session 2000-01. Back
37
Each of the three intelligence agencies received an audit qualification. Back
38
"Nil" opinions were given where the accounts were insufficiently
developed to offer an audit opinion. Back
39
In some (rare) cases, an individual Accounts Direction might be
issued to a body. Back
40
29th Report of the Committee of Public Accounts, Progress on
Resource Accounting and the Adoption of Resource-Based Supply,
(HC 556, Session 1999-2000), para 18. Back
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