Government accounts are getting better

Wednesday, 24 March 2004 6:34 AM

The Government's financial watchdog, the National Audit Office, has today praised the improving quality of Departments' accounts.

Since the introduction of resource accounting for public sector bodies - replacing the old-fashioned cash accounting that has long been unacceptable in the private sector - Departments have struggled with the new system.

Many found, the NAO has previously told the House of Commons' Public Accounts Committee, that in-house accounting staff were not up to the task, and were forced to bring in outside experts to comply with the new requirements.

However, NAO head Sir John Bourn - the Comptroller and Auditor General - announced today that his organisation only had to qualify the accounts of half as many Departments in 2002-2003 as it did the previous year.

Sir John also praised the progress being made towards the production of "whole of government" accounts, due for 2007. The first dry run undertaken last year was described as "generally successful".

Nonetheless, Sir John warned that some Departments still view the accounts production process as merely a year end activity, rather than as something that underpins effective in-year financial management and resource planning.

In the CAG's General Report, published today, Sir John stated, "I am pleased by the improvements that I have seen in financial management across central Government in the past year and, in particular, by the strengthening of corporate governance arrangements.

"The NAO and I will continue to provide expertise as well as oversight in assisting further progress."

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