Source · Select Committees · Public Accounts Committee
Recommendation 4
4
The Department has regularly failed to follow public spending rules and across the Departmental Group...
Conclusion
The Department has regularly failed to follow public spending rules and across the Departmental Group there is a track record of failing to comply with the requirements of Managing Public Money. The Department is required to obtain approval from the Treasury before committing to expenditure where such authority is needed. The Treasury has confirmed that £1.3 billion of the Department’s spending in 2020–21 did not have HM Treasury consent and was therefore ‘irregular’. The Treasury has stated that ‘in the vast majority of cases’ this was because either the Department and/or the NHS had spent funds without approval or in express breach of conditions. While the Department consciously relaxed financial controls during its pandemic response, this is not the first-time such instances of non-compliance have been identified. In 2019–20 the value of unapproved special payments across the Departmental Group was estimated as £18 million. Recommendation: The Department should write to us by October 2022 setting out the systems and processes it has established as part of its ‘financial reset’ to ensure the regularity of expenditure and compliance with spending controls across the Departmental Group going forward.
Government Response
Not Addressed
HM Government
Not Addressed
4: PAC conclusion: The Department has regularly failed to follow public spending rules and across the Departmental Group there is a track record of failing to comply with the requirements of Managing Public Money. 4: PAC recommendation: The Department should write to us by October 2022 setting out the systems and processes it has established as part of its ‘financial reset’ to ensure the regularity of expenditure and compliance with spending controls across the Departmental Group going forward. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2022 4.2 The department is undertaking a finance reset programme, which is establishing robust financial controls and governance across the department and its arms’ length bodies (ALBs). The department is making good progress in this area, with the programme of activity continuing through to the end of this calendar year. 4.3 The programme has 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. 4.4 To date, the department has: • implemented updated financial delegations across the department and its ALBs, taking account of internal and external controls; • developed a training programme which will be mandatory for all senior civil servants, aimed at increasing their awareness and understanding of their roles as budget holders; and • re-developed internal business case guidance, to improve the quality of business cases going forward. The department will provide a further update to the Committee by October 2022.