Amyas Morse, the head of the National Audit Office, said
today:
"The Department for Communities and Local Government
spends some £34 billion a year and so good financial management is
very important, not just to accountants but also to taxpayers and
public service users.
"The Department rightly takes financial management
seriously and is making improvements. However, it has more to do.
As a priority, it must identify and understand the gaps in its
financial and business management skills and set about filling
them."
The Department for Communities and Local Government has shown
commitment to financial leadership and governance and has improved
its financial management over the last couple of years. However,
there is more to do for the department to embed good financial
management throughout the department and to improve the financial
and business management skills of its staff.
The department has increased the number of professionally
qualified finance staff, particularly in senior finance roles, and
has shown a commitment to improving financial leadership and
governance throughout the organisation. Further recruitment and
training of staff with financial and business management skills
would allow the department to improve further its analysis and
interpretation of financial data and its management of complex
activities.
The department has improved its business planning and
decision-making, but the quality and analysis of the financial
information supporting investment decisions still needs improvement
and the investment process requires further development to deal
better with situations requiring an urgent response.
At present, the department cannot accurately report expenditure
against its strategic objectives, but can provide only notional
allocations of financial information by objective. As a result, it
cannot easily identify or understand the impact of funding
decisions on performance and outcomes.
The department has improved its business planning and, for
2009-10, budgets were agreed before the start of the financial year
– an improvement on previous years.