4 Conclusion
51. The Ministry of Defence has made some improvements
to its reporting of information since last year but much work
is still needed before it meets the standards we would expect
to see in its Annual Report. We have set out the areas where the
MoD needs to provide more extensive information on its performance.
52. The MoD has been reviewing its risk management
arrangements and we look forward to seeing the results of its
review. We are concerned that structural changes have led to a
lack of clarity in aligning roles and responsibilities with risk
management structures. Our major concern and, apparently the Defence
Board's second strategic risk, is shortage of key personnel. This
was evidenced by the increase in the number of pinch point trades,
the high level of voluntary outflow and the continuing breaches
of harmony guidelines. The Defence Board should take these shortages
seriously.
53. The provision of reliable management information
is critical to the effective management of an organisation. It
is crucial that the MoD improves its management information systems
and the quality of the management information produced. In particular,
the MoD should concentrate on improving its financial management
information.
54. For the seventh successive year, the Comptroller
and Auditor General (C&AG) qualified the Ministry of Defence
(MoD) Accounts for 2012-13. The qualifications were:
· The regularity of the treatment of
the impairment of the valuation of the German estate resulting
from the withdrawal of UK Forces from Germany;
· Non-compliance with international reporting
standards on the treatment of some contracts; and
· The valuation of inventory and non-current
assets.
The latter two problems are likely to persist
beyond 2014-15. The MoD needs a clear plan and timetable as to
how and when it will achieve a clear audit opinion from the C&AG.
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