Northern Ireland Affairs Committee

Session 2004-2005

11 January 2005




NORTHERN IRELAND DEPARTMENTS' 2002-03 RESOURCE ACCOUNTS

COMMITTEE EXPRESSES CONCERN ABOUT NORTHERN IRELAND DEPARTMENTS' ACCOUNTS

The Northern Ireland Affairs Committee today published a report on Northern Ireland Departments 2002-03 resource accounts.  The Sub committee took evidence from the Department of Finance and Personnel and the Department for Social Development in September 2004.

The Committee was extremely concerned that in important respects these departments had demonstrated unsatisfactory financial management. While some progress had been made recently in reducing the level of negative audit opinions from the Comptroller & Auditor General for Northern Ireland on the accounts of Northern Ireland Departments from ten in 2001-03 to four in 2003-04, the level remained far too high.

In addition, the Committee found that the Department of Finance and Personnel had not demonstrated the rigour and foresight which might have been expected in assisting departments to prepare for resource accounting, and also that it was unlikely to meet the deadlines for introducing key accounting programmes to increase the usefulness of accounts. Potential savings of £2 million in purchasing consultancy services across the Northern Ireland civil service had not been achieved because the Department's own rules were not being followed by staff.

The performance of the Department for Social Development was of particular concern to the Committee. The Department's accounts were severely qualified by the Comptroller and Auditor General for Northern Ireland in 2001-02, 2002-03 and 2003-04, and effective action has not been taken by the Department to correct this most unsatisfactory state of affairs. Levels of fraud and error in the benefit programmes administered by the Department and its agencies were £120.9 million in 2002-03, and while this had been reduced to £112.3 million in 2003-04, the scale of such losses was completely unacceptable.

The Committee was also deeply concerned that the computer system being deployed by the Child Support Agency to process cases appeared to be failing, and is likely to require system 'fixes' until 2005. This was preventing all cases being brought onto the system and was undermining the effective administration of benefits.    

Commenting on the performance of these Departments, the Rt Hon Michael Mates MP, the Chairman of the Committee said:

"We expect the very highest standards of financial management from those charged with looking after public money in Northern Ireland.  What this inquiry by the Sub committee actually found was that the standard of administration is falling far short of what Parliament and the people of Northern Ireland have a right to expect.

 "These Departments are not demonstrating good financial administration and the Committee is seeking an immediate improvement in the quality of their performance.   For example, the losses sustained by the Department for Social Development in 2002-03 through fraud and error amounted to 7.6 percent of total benefits expenditure.  While this was reduced to 3.2 percent in 2003-04, these figures remain a disgraceful waste of public money.  We expect the Department for Social Development, with the active assistance of the Department of Finance and Personnel, to ensure that there is a substantial reduction in fraud and error levels in the current year.

"The Committee expects the officials directing the financial management of  Departments to demonstrate vigour, creativity and control over these complex and important operations. There is no more important role for the civil service than to ensure the integrity of the financial system guarding public money. We trust that when representatives from these Departments appear before us again they will have a much better story to tell."