"I have qualified my opinion on the financial statements
of the Imperial War Museum for the year ending 31 March 2009. My
qualified opinion is due to the irregular use of resources relating
to the acquisition of a new fire and security system by the
Museum.
"The Museum should have sought approval from the
Department for Culture, Media and Sport before entering into the
arrangement and this lack of authority has led me to conclude that
the transaction does not accord with the intention of Parliament
and so is irregular. I am encouraged by the Museum’s commitment to
improve future capital investment appraisals as a result of my
findings."
Amyas Morse, head of the National Audit Office, 17 June
2010
The Comptroller and Auditor General has qualified his audit
opinion on the Imperial War Museum's annual accounts because of an
irregular lease arrangement for a new security system. The Museum
did not obtain approval from the Department for Culture, Media and
Sport or the Treasury before entering the arrangement, and
retrospective approval has not been given.
The Imperial War Museum is a charitable non-departmental public
body governed by a Board of Trustees. In 2008-09, it received
almost £24 million in public money from the Department for Culture,
Media and Sport and raised over £18 million from trading,
admissions and a variety of other sources.
During 2006, the Museum identified the need to update the fire
and security system at its Lambeth site and, in 2008-09, spent over
£600,000 on the project. At this time, the Museum perceived it had
a funding shortfall. To counter this, it devised an arrangement
which saw the assets that formed the system sold to a finance
company and leased back. The Financial Memorandum of the Museum
required it to seek prior approval from the Department. However, it
failed to do so.
In addition, there was no evidence of a formal review process
for the business case or potential funding options in accordance
with guidance from HM Treasury. The processes for approval by the
Museum’s Board of Trustees did not provide a full identification of
options or risks. The Museum has responded to these findings by
identifying improvements to the assessment of capital expenditure,
which it will apply to future significant capital investments.
These improvements are disclosed within the Museum's Statement on
Internal Control.