"I have qualified my audit opinion on the 2008-09
accounts of the Equality and Human Rights Commission as a result of
irregular expenditure in a number of areas. I am satisfied that it
is taking the issues we have raised seriously although, until it
develops fully effective financial and management controls, it will
face continuing risks to its ability to manage its expenditure
properly."
Amyas Morse, head of the National Audit Office, 15 July
2010
The Comptroller and Auditor General has qualified his audit
opinion on the 2008-09 accounts of the Equality and Human Rights
Commission owing to irregular expenditure in a number of areas.
In particular, the Commission entered into seven Single Tender
Procurement Actions over £50,000 without seeking the appropriate
authority from the Government Equalities Office (GEO). The
Commission's review of its procurement also identified some serious
failings in procurement activity such as inadequate forward
planning and a lack of focus on compliance with procedures.
The Commission has made immediate and significant changes to
improve its procurement processes. It has removed a number of
delegated authorities to incur expenditure, has restricted the
number of people authorized to raise requisitions and has applied
additional authorization processes for all high value purchases.
The Commission is also taking action to ensure that all its staff
understand the procurement rules and comply with them.
Another area of irregular expenditure related to maximum pay
rises for permanent employees, which the Commission is required to
agree with HM Treasury and the GEO annually. The Commission
breached the agreed limits for 2007-08 and 2008-09, with average
increases for staff of 6.81 per cent (against a maximum of 4.65 per
cent) in the last six months of 2007-08 and 4.8 per cent (against a
maximum of 4.45 per cent) in 2008-09. As a result of this breach,
in December 2009 the GEO imposed a financial penalty of £508,000 on
the Commission. However, the Commission's breach of the remit was
unintentional and reflected the fact that it employed a lower
number of permanent staff than originally estimated when agreeing
the remit. The Commission considers that this problem related to
the set up phase of the Commission and should not recur.