Source · Select Committees · Public Accounts Committee
Recommendation 27
27
Accepted
Some RFCA financial reporting failed to comply with HM Treasury guidance.
Recommendation
Some of the RFCAs’ financial reporting has not complied with HM Treasury guidance and International Financial Reporting Standards. For example, the RFCAs’ accounts have not included a cash flow statement, nor have they correctly disclosed a defined benefit pension scheme for employees. Non-compliance with these rules has created an inconsistency in the financial reporting between the Department and the Council.43 The Council accepted responsibility and acknowledged that initially it did not have a good understanding of the Treasury’s financial reporting manual or guidance on preparing an annual report and accounts. The Council insisted, however, that the accounts have still been audited and that it knew how the money had been received and spent. The Council noted that the Department had also not picked up on the missing cash flow statements but, now that both the Department and the Council were aware of it, a cash flow statement would be included in future accounts.44
Government Response Summary
The department is committed to supporting the RFCAs and ensuring that they meet the required financial standards and has already funded a professionally qualified Finance Director as recommended in the 2019 review and will work closely with the RFCAs to ensure full compliance with public financial requirements.
Government Response
Accepted
HM Government
Accepted
6c. PAC recommendation: [As a matter of urgency, the Department should:] • work with the Council to ensure that in future the RFCAs understand the requirements they must comply with and are equipped to do so. 6.6 The government agrees with the Committee’s recommendation. Target implementation date: March 2026 6.7 The department is committed to supporting the RFCAs and ensuring that they meet the required financial standards and has already funded a professionally qualified Finance Director as recommended in the 2019 review. The newly agreed Treasury compliant Framework document clearly sets out financial controls, reporting expectations and oversight arrangements. The department will work closely with the RFCAs to ensure full compliance with public financial requirements. 6.8 The department will provide updates on progress as requested by the Committee.