Examination of Witnesses (Questions 100-119)
HOME OFFICE
26 APRIL 2006
Q100 Greg Clark: Three qualified
accountants, so somebody decided that three was enough.
Sir John Gieve: Yes.
Q101 Greg Clark: Do you think eight
is enough?
Sir David Normington: We have
nine now out of 16 and therefore it is eight or nine. It depends
on their competence as well as their qualifications but it is
that sort of number.
Q102 Greg Clark: Can you confirm
that two of the three officials responsible for preparing the
disputed accounts were quite junior members? They were executive
officers. They were not senior civil servants?
Sir David Normington: It depends
what counts as senior here.
Q103 Greg Clark: Can you confirm
that they were executive officers?
Sir David Normington: There were
executive officers working on the accounts.
Q104 Greg Clark: Is it correct that
two out of the three were executive officers and no higher?
Ms Kilpatrick: It is my understanding
that they were relatively junior staff who were working on the
accounts.[12]
It is clear from the C&AG's Report that one of the problems
was that there was a lack of senior oversight of that work which
is one of the issues that we have now addressed. We have put in
place very rigorous governance arrangements to make sure that
senior management have sight of all stages of the accounts' production
and process.
Q105 Greg Clark: Can you turn to table
one in the Report, page 26? This is a time line of the accounts.
Can you tell me at what point in this time line you became aware
of the deficiencies?
Sir John Gieve: Yes. First of
all, the internal audit investigation at the turn of the year
2004-05 was before the Audit Committee. I was there and I saw
the report. I was aware that there were problems. They had been
identified by internal audit and there was an action plan to put
them right.
Q106 Greg Clark: What date was that?
Sir John Gieve: April 2005.
Q107 Greg Clark: Not before?
Sir John Gieve: I think that was
the first time I was aware of them. We had a plan but the internal
auditors at that point thought that the progress was already being
made to put them right.
Q108 Greg Clark: When were ministers
alerted to this?
Sir John Gieve: I do not think
ministers were alerted to this until much later, possibly not
until January. I cannot remember whether I told the Secretary
of State in November or December 2005. I suspect it was one of
those or January 2006.
Q109 Greg Clark: This was quite late
into the process by which time it was obvious that they were going
to be qualified at best, if not disclaimed.
Sir John Gieve: As I have explained,
we were still hoping, certainly until the beginning of January,
that we would avoid a disclaimer.
Q110 Greg Clark: Ministers were not
kept updated with the concerns?
Sir John Gieve: No. I would not
expect to tell ministers about—
Q111 Greg Clark: Who did you tell
in November or December? Was it the Home Secretary or one of the
junior ministers?
Sir John Gieve: If I told anyone
it would have been the Secretary of State.
Q112 Greg Clark: You must remember
the conversation.
Sir John Gieve: I do not. I saw
this as official business, my business and the audit committee's
business, not the Secretary of State's business.
Q113 Greg Clark: When you finally
told the Secretary of State, was it the Secretary of State or
was it one of the junior ministers?
Sir John Gieve: I cannot remember
if I mentioned it to him. I am sure that David will have mentioned
it to him in January when the NAO reached their decision. I may
not have mentioned it to him. I had seen this as Permanent Secretary
business.
Q114 Greg Clark: These are matters
for officials rather than ministers?
Sir John Gieve: Yes.
Sir David Normington: This is
Accounting Officer business.
Q115 Greg Clark: It is really the
business of the Secretary of State.
Sir David Normington: The Home
Secretary needs to be informed but we would not expect him to
be involved in the construction and signing off of the accounts.
Q116 Greg Clark: Part of the hard
time that the Home Secretary has been given today in the chamber
is for not having enough of a grip on his department. You are
telling the Committee that the financial aspects of the department
are nothing to do with him. He is almost the last to know.
Sir David Normington: How we manage
the budget, what we spend the money on, the effectiveness with
which we spend the money is his responsibility but the preparation
of the accounts is official business and is the Accounting Officer's
responsibility. I would not expect him to be held responsible
for these accounts.
Q117 Greg Clark: Have you had conversations
with the Home Secretary on this year's accounts for the year to
April?
Sir David Normington: Only briefly.
I have had a brief conversation about where we are.
Q118 Greg Clark: Have you told him
that he has anything to worry about or have you reassured him?
Sir David Normington: We are not
very far into the production of the 2005-06 accounts.
Q119 Greg Clark: They have to be
finished by the summer according to Sir John's rules.
Sir David Normington: We have
agreed that our target date for signing them off will be 30 September.[13]
12 Note by witness: There were three full time
qualified accountants engaged in the production of the 2004-05
Resource Accounts, one at grade 7 and two at Senior Executive
Officer. They were reporting to a grade 6 Head of Branch who was
also a qualified accountant. 12 other staff were qualified Accounting
Technicians or equivalent. In total, the Financial Accounting
team located in Liverpool consisted of 21 staff during 2004-05. Back
13
Note by witness: In March 2005, the Home Office had agreed
a date of 30 September as a target date for certification of the
accounts by the Comptroller and Auditor General of the National
Audit Office (NAO). In order to ensure that the accounts that
are produced for 2005-06 are of the highest possible quality,
we are currently discussing with Treasury and the NAO whether
it would be prudent to delay signing until 31 October. Back
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