Source · Select Committees · Public Accounts Committee
Recommendation 13
13
Accepted
Departments underutilise and produce inconsistent Accounting Officer Assessments for public funds.
Recommendation
This Committee has continually advocated for the use of Accounting Officer (AO) Assessments to support high quality decision-making and enhance transparency. The Treasury’s guidance suggests that it is good practice for an AO Assessment to be produced for each significant novel and contentious transaction or proposal involving the use of public funds.36 Our 2022 report on Improving the Accounting Officer Assessment process 27 C&AG’s Report, para 3.10; Q48 28 Q27 29 Q22 30 Committee of Public Accounts, Improving government planning and spending, Seventy-Eighth Report of Session 2017–19, HC 1596, 8 February 2019, Conclusions and recommendations para 1 31 Institute for Government, Whitehall Monitor 2024, January 2024, page 19 32 Q16 33 Q69 34 Qq33–34 35 Q37 36 HM Treasury, Accounting Officer Assessments: Guidance, May 2023 Monitoring and responding to companies in distress 13 found that departments do not make as much use of these assessments as they should.37 The quality of these assessments varies across departments, with some not providing sufficient detail to allow for a good understanding of the programme or the accounting officer’s assessment of risks.
Government Response Summary
The government states the recommendation regarding Accounting Officer Assessments is already implemented. It details existing guidance for AOs on considering commercial risks, value for money, and feasibility, as well as the support provided by finance directors and commercial teams.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 Guidance documents require Accounting Officers (AOs) to consider commercial risks in their decision-making, including around the financial resilience of suppliers. Individual departments are then responsible for providing their AO advice in line with this guidance. 3.3 The AO Assessments Guidance sets out four standards when considering projects and proposals. AOs must consider value for money, which includes evaluating risks from third party involvement. The feasibility standard also requires AOs to consider commercial factors. 3.4 Managing Public Money (MPM) complements the above guidance and sets out responsibility for ensuring an organisation’s procurement, projects and processes are systematically evaluated to provide confidence about suitability, effectiveness, prudence, quality, and good value. MPM includes specific expectations on assessing risks and provides links to commercial guidance. 3.5 The Government Commercial Function’s ‘Sourcing Playbook’ sets out a recommended approach to assessing the economic and financial standing of bidders, determining their capacity to deliver as part of the initial selection process. There is a chapter on resolution, providing guidance on monitoring and contingency planning for the failure of suppliers (underpinned by a detailed resolution planning note). 3.6 The Orange Book provides detailed guidance on risk management, including risks from supplier failure and mitigations to manage this. 3.7 In addition to the above guidance, departments and AOs are supported by professionally qualified finance directors and specialist procurement and commercial teams. MPM requires all draft assessments to be approved by a department’s senior finance officer before being submitted to the AO.