Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Accepted
Electoral Commission entered new office lease agreements in Belfast and Cardiff during 2023-24.
Conclusion
The Electoral Commission operates from offices in Belfast, Cardiff, Edinburgh and London. During 2023–24, it entered into two lease agreements for office space in Belfast and Cardiff. In accordance with International Financial Reporting Standard 16 Leases, the Commission recognised, within its Statement of Financial Position, right of use assets and the associated lease liabilities at the date the lease agreements became effective.
Government Response Summary
The Electoral Commission reviewed and increased Finance team capacity, updated processes, and improved technical accounting capability by providing additional training, revising procedures, and commissioning a technical review.
Government Response
Accepted
HM Government
Accepted
1.4 The overspend was due to the Commission’s failure to appropriately account for the budgetary impact of new leases for office space in Belfast and Cardiff in either the main or supplementary spending estimates submitted to Parliament. This was caused by an error in a technical accounting judgement relating to IFRS 16 by the finance department and flagged by the NAO in its 2023-24 audit. 1.5 The Electoral Commission (‘the Commission’) has taken the following actions: 1.6 Reviewed and increased Finance team capacity (and structure): the Commission has established a new Finance organisational structure with increased numbers of suitably qualified staff across all teams, including a permanent finance director to oversee the Commission's financial management and processes. The National Audit Office (NAO) states that it considers its recommendations in relation to finance team capacity have been implemented. 1.7 Updated processes: the Commission has updated its processes to ensure that the impact of any operational decisions on its Accounts is fully understood and reported in an accurate and timely manner. Including implementing regular reviews and checks to prevent similar issues in the future. The NAO notes that the Commission "performed significant work to respond to the recommendations by the NAO audit team". 1.8 Improving technical accounting capability: the Commission has addressed technical accounting errors related to IFRS 16 by providing additional training to the finance team, revised procedures to ensure accurate accounting judgements and estimates, and commissioning a technical review and report by an appropriately qualified and reputable third- party accounting organization.