Source · Select Committees · Public Accounts Committee
Recommendation 28
28
Accepted
Departmental and Group accounts repeatedly qualified due to inventory valuation failures.
Conclusion
The Department and bodies within its Group have had a number of financial governance and accounting failures in recent years. The Department Core and Group accounts have been qualified by the C&AG for the past two years. In both 2020–21 and 2021–22 there was a ‘true and fair’ qualification arising in respect of inventory, this arose as the Department was unable to perform stock takes to evidence the existence, completeness and valuation of inventory.55 The Department acknowledged that the inventory qualification will remain until the Department has disposed of all of the excess and unusable PPE it has.56
Government Response Summary
The government states it has already undertaken a financial reset programme to establish robust financial controls and governance, putting in place proportionate controls to reduce future financial and governance failings, with a target implementation date of December 2023 for the programme.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2023 6.2 As the Committee is aware, the department has undertaken a financial reset programme. This programme established robust financial controls and governance across the department and its arms’ length bodies. 6.3 This programme put in place a proportionate, risk-based financial control framework that ensures that areas of spend subject to external controls (for example, by HM Treasury and Cabinet Office) are reviewed and approved as required by Managing Public Money. Internal delegations ensure that spending proposals below those subject to external controls are also subject to appropriate review and approval and maximise value for money. 6.4 During 2021-22 the financial reset programme was still being implemented. The department has now put into place controls which are proportionate in reducing the risk of future financial and governance failings. 6.5 Despite the clear processes and improvements set out above, it is important to note that ensuring full compliance across such a diverse and sizeable group is inherently challenging. As such, whilst the department believes the processes and controls in place represent a proportionate and robust risk mitigation, they cannot guarantee full compliance from all bodies. 6.6 The department keeps these controls under continual review and applies a ‘lessons learnt’ process in the event that governance issues are identified.