"The Ministry of Justice has made considerable and
welcome improvements to its financial management since I last
reported. This is crucially important if the Ministry is to meet
its cost reduction targets.
"However, the Ministry should not underestimate how much
there is still to do. Collection of fines and assets due has not
improved; the Legal Services Commission needs to reduce the error
rate in its payment of legal aid; and good financial management
must become business as usual."
Amyas Morse, head of the National Audit
Office, 23 November 2011
Financial management at the Ministry of Justice has improved
considerably since the National Audit Office last examined this
subject in 2010. However, in some important areas, such as income
collection, the Ministry still has a great deal to do.
The NAO’s 2010 report was critical of the Ministry in three main
areas: the consistency of its financial management approach; its
understanding of its costs; and its financial management systems
and processes.
The Ministry now has effective governance structures in place
and, in 2010-11, managed its money far more effectively, allowing
it to redeploy funds to where they were most needed. Today’s report
has found that financial management is now much more central to the
operation of the organization and the quality and consistency of
financial planning and forecasting have improved. Financial
management is being led from the top and financial information for
decision making is more relevant and useful, with the Ministry’s
planning work allowing it to bring together a wide range of
business information to estimate the financial implications of its
workload. It has also improved oversight of its arm’s-length
bodies.
The Ministry still has gaps in financial reporting skills and
some of its underlying systems need further improvement. It was one
of only two government departments that failed to produce their
financial accounts by the 2011 summer Parliamentary recess. Several
factors led to the Ministry’s problems, although the most immediate
was that accounts for the National Offender Management Service were
produced late. The Legal Services Commission, an arm’s-length body
of the MOJ, had the audit opinion on its 2010-11 accounts qualified
owing to the potential level of error, put at an estimated £50
million. There has also been little change in how the Ministry
monitors and collects assets due under confiscation orders, with
the amount of outstanding debt having increased by almost £400
million in 2010-11.
Publication details:
HC: 1591, 2010-2012
ISBN: 9780102976960