Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Authorise additional resources for Ofqual's capital breach and mandate future accounting management plans.
Recommendation
The Office of Qualifications and Examinations Regulation (Ofqual) exceeded its Capital Departmental Expenditure Limit of £805,000 by £1,931,000 and its Capital Annually Managed Expenditure Limit of £0 by £64,000. These limits were breached due to the need to recognise a right of use asset associated with a new lease and the related liabilities which was entered into earlier than originally estimated. recommendation a. Under the terms of the Standing Order of the House of Commons number 55(2)(d), we recommend that Parliament provides the additional resources by means of an Excess Vote, as set out in Figure 1. 2 b. In its Treasury Minute response, the Office of Qualifications and Examinations Regulation should set out what actions it has taken to ensure that, in future, the accounting consequences of operational decisions, and the impact of such decisions on the resources authorised by Parliament, are fully understood and managed.
Government Response Summary
The government agrees with the recommendation. Ofqual assures the Committee that it already scrutinizes forecasts monthly, maintains dialogue with HM Treasury, and engages with external auditors to ensure accounting consequences of operational decisions are understood and managed.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. circumstances leading to the excess. Whilst the Committee was satisfied that this breach resulted from a technical point of interpretation rather than a failure of control or governance, it has nevertheless sought and received assurance that management has responded appropriately to the specific recommendation of the auditors in this respect, namely that management should ensure it has the capacity, technical knowledge and processes in place to appropriately consider the accounting and budgetary reporting treatment for transactions that may be complicated to account for. In addition to this specific recommendation, forecasts are scrutinised on a monthly basis, a dialogue is maintained with HM Treasury colleagues throughout the year and management is engaged with the external audit team well in advance of year-end to ensure that any such issues are surfaced and resolved in a timely manner.