Session 2009-10, Wednesday 24 February 2010
Publication of Report: Ministry of Defence Annual Report and Accounts 2008-09
MOD'S CONTINUED POOR ACCOUNTING IS UNACCEPTABLE, SAYS DEFENCE COMMITTEE
Failures in the administration of service personnel and sensitive equipment are unacceptable, says the Defence Committee in its Report on the MoD's Annual Report and Accounts, published today. The National Audit Office qualified the Department's resource accounts for the third year in a row.
The main area of concern with the MoD's accounting related to problems associated with the recently introduced Joint Personnel Administration system (JPA). Last year the Committee had made a number of recommendations for JPA's improvement. However, the Comptroller and Auditor General was forced to qualify the Department's accounts again this year due to further complications with the system, including errors in delivering specialist pay to the tune of £268 million and a lack of evidence to show that the errors in accommodation and food charges, amounting to £83 million, had been made good.
Chairman of the Committee, the Rt Hon James Arbuthnot MP, said "Even after last year's assurance given to us by both the Secretary of State and the Permanent Under Secretary, the MoD still fails to provide accurate and sufficient audit evidence to support their accounts. This cannot be acceptable."
A key worry for the Committee was the inability of the MoD to account for certain items of expensive and sensitive equipment. The National Audit Office had carried out a selective audit of the army's relatively new £1.3 billion BOWMAN tactical communications system which provides integrated secure radio, intercom and internet services. Only 89% of these assets could be accounted for by the end of the year, due to the problems encountered with accounting for radios in use on the battlefield.
Chairman of the Committee, James Arbuthnot, said "That the MoD could not, at a given time, account for the whereabouts of radios worth £155 million is unacceptable. The security implications associated with losing equipment such as this are significant; having an effective audit trail is the only way to ensure that all equipment is accounted for. "
The Committee recommends that the National Audit Office should continue to monitor closely the MoD’s management of stock, perhaps giving consideration to undertaking a broader analysis of this problem at some future date. The Committee believes that the failures in the MoD’s accounting have the potential to threaten the long-term capability of the Department.
The Committee also expresses concern in relation to the MoD’s compliance with data protection laws, noting a significant increase in the number of data loss incidents over the last year. The Committee suggests that unless the MoD can prove that it has made progress over the next year, it may be necessary to appoint a “champion” to lead the way in improving data security.
NOTE FOR EDITORS:
The Committee was nominated on 13 July 2005. The Defence Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Ministry of Defence and its associated public bodies.
HCDC (House of Commons Defence Committee)