"Yet again I have qualified the accounts of the
Department for Environment, Food and Rural Affairs because of
material disallowance penalties following incorrect payments to
farmers.
"There continues to be a significant
loss to the taxpayer because of weaknesses in the administration of
the Single Payment Scheme by the Rural Payments Agency. I welcome
the appointment of a new senior leadership team at the Agency which
should now urgently address the issues which have led to my
qualifications."
Amyas Morse, head of the National Audit Office, 20
July 2011
Amyas Morse, the Comptroller and Auditor
General, has today qualified the respective accounts of the
Department for Environment, Food and Rural Affairs and the Rural
Payments Agency.
Defra’s accounts have been qualified on the
grounds of regularity, because of penalties totalling £175 million
from the European Commission.
Both the Rural Payments Agency’s and Defra’s
accounts have also been qualified on the grounds that the Agency
has not been able to make an accurate assessment of the value of
overpayments and underpayments which have been made to farmers
since the Single Payment Scheme began.
During 2010-11, Defra has recognised
disallowance penalties imposed by the European Commission because
EU regulations have not been applied correctly in the processing of
EU schemes. The disallowance includes penalties of £145
million in respect of the administration of the Single Payment
Scheme in England in 2007, 2008 and 2009. The remaining penalties
relate to the Fruit and Vegetables Scheme (£24 million); and the
Rural Development Programme for England 2007 and 2008 (£6 million).
Defra’s accounts also include provision for a further £84 million
of estimated disallowance penalties, including £53 million for the
Single Payment Scheme in England for 2010.
Disallowance penalties have been incurred as a
direct result of weaknesses in the management and administration of
the Rural Payments Agency, particularly for the early years of the
Single Payment Scheme. The Agency continues to experience
considerable difficulties in quantifying the value of overpayments
and underpayments made to farmers under the Single Payment Scheme.
However, the report on the Rural Payments Agency notes some
improvements, including in core financial controls and the
appointment of a new senior leadership team.
Publication date: 20 July 2011