Source · Select Committees · Public Accounts Committee
Recommendation 30
30
Accepted
DHSC Group accounts received regularity qualification for exceeding budget and unapproved expenditure.
Conclusion
Furthermore, the C&AG has qualified his ‘regularity’ opinion on the DHSC Group accounts for the past two years: the Department exceeded its budgetary limit for Resource Non-Budget Expenditure as authorised by Parliament in 2021–22 as a budget of £nil was authorised and the Department incurred an outturn of £2.457 billion; and in 2020–21, the Department spent £1.3 billion on projects they were required to but did not have the appropriate approval from Treasury for, and therefore was irregular, and also in 2020– 21 there was insufficient evidence to demonstrate that the expenditure incurred by the Department, particularly on COVID-19 was regular, with the assessment of potential fraud losses being inadequate.58
Government Response Summary
The government agrees with the implied concern, stating it has already implemented a financial reset programme with robust controls to reduce future financial and governance failings, which are kept under continual review.
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.