Letter from Mr David Varney, Chairman,
HM Customs and Excise, to the Chairman of the Committee
Terry Byrne, former Director General Law Enforcement
in HM Customs, wrote to you on 30 December volunteering his observations
on the way in which the above matter has been addressed in the
Department's 2003-04 Accounts. Mr Byrne's assertions are based
on only a partial knowledge of the facts and an apparent misunderstanding
of the material in the Annual Report and Accounts. As Mr Byrne
himself states, he was precluded from some of the discussions
and consideration involved by virtue of his friendship with one
of the individuals under investigation.
I should begin my assuring you and your Committee
that the C&AG and his officials have been afforded the fullest
possible access to relevant papers and information, both in the
preparation of their report on the excess vote and, more recently,
in their further review of these matters in the light of Mr Byrne's
letter.
Contrary to the impression conveyed in Mr Byrne's
chronology of events, it was not the case that he was a lone voice
raising concerns about these matters. Nor, as he implies, was
there a failure to act on the part of top management once they
were alerted to all the dimensions of the position in early 2004.
Having consulted my two predecessors as accounting officer, I
remain satisfied that the relevant statement in our Accounts gives
a true and fair view of this matter, and that the C&AG's Report
is soundly based upon a full and open disclosure to the NAO.
I should add that there has been no attempt
whatsoever to "shift the blame" on to staff in Law Enforcement
dealing with the mechanics of the payments. As part of a much
wider initiative we had, in 2003-04, been strengthening internal
disciplines on the authorisation of expenditure. The lessons which
we rightly drew from this particular episode led us to do two
things: first, to underscore, to budget holders across the Department,
the need to consult the central finance team in any instance where
expenditure might be "novel or contentious"; and, second,
significantly to reinforce our governance arrangements at the
top of the organisation for the systematic oversight of all such
police investigations and related enquiries.
David Varney
Chairman
26 January 2005
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