Headlines: May 22nd, 2009

The National Audit Office has published its report on financial management in the Home Office, declaring that the department has made “substantial improvements” but still needs to do more.

The report is the second in a series of reports on financial management in Government. It says that the Home Office has come a long way since 2006, when the Comptroller and Auditor-General disclaimed an opinion on the 2004-5 accounts. But it says that “further sustained improvement” is still needed, so that good financial management becomes “business as usual” across the department.

The NAO noted that the Home Office now had more professionally qualified finance staff, and had improved financial governance. It also noted improvements in financial planning and decision making; budgeting; financial monitoring and forecasting; and financial reporting. The unqualified audit opinion on the 2007-08 Resource Accounts was cited as an “important symbol” of the department’s progress.

However, the report also described areas where more improvement was still needed. It singled out the Home Office’s £725 million underspend on its capital budget between 2003 and 2008, saying that strategic management had not been responsive enough. The NAO also recommended a need for the Home Office to develop more understanding of its costs and the relationship between resource consumption and service outcomes.

Tim Burr, head of the National Audit Office, said: “The Home Office has made considerable progress in strengthening its financial management which was much needed. It still needs to establish clearer links between the use of resources and service delivery outcomes. Similarly, the Home Office has to improve individual project oversight and management of its broader capital programme so that it can identify funds which are no longer needed, then release them to be deployed elsewhere.”