Source · Select Committees · Public Accounts Committee
Recommendation 40
40
Accepted
Lower materiality threshold for DBT accounts increased complexity and workload from inherited balances.
Conclusion
The Department said that the increased complexity of its accounts when compared to those of DIT was driven by balances moving across from BEIS.64 These balances had to be accounted for to a much higher level of precision due to the accounting concept of ‘materiality’. The materiality level set in BEIS for the audit of the Core Department was £575 million.65 The new department’s gross expenditure is significantly lower than that spent by BEIS and accordingly, the materiality level for the 2023–24 accounts of the Department was £43.5 million.66 This meant that some 59 HM Treasury, DAO 06/23 - Accounts Directions 2023–24, December 2023 60 DBT ARA 2023–24 61 Q 35 62 HM Treasury, Government Financial Reporting Manual: 2023–24, December 2023, p 84 63 Q 35 64 Q 35 65 BEIS, Annual report and accounts 2022 to 2023, p 179 66 DBT ARA 2023–24, p 123 19 balances which were previously immaterial in BEIS became highly material to the new department, necessitating increased work by the Department’s finance team.
Government Response Summary
The government agrees with the Committee's observation and confirms that Annual Report and Accounts production and audit are progressing well, on target for a September 2025 publication, and will inform the Committee if the deadline is at risk.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: September 2025 5.2 The department will inform the Committee should it become likely that the September deadline will be missed. The Annual Report and Accounts production and audit are currently progressing well and are on target for a September publication.