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Firebuy Ltd 2010-11 and 2011-12 financial statements

Amyas Morse, the Comptroller and Auditor General, has qualified his audit opinion in respect of two years of financial statements for Firebuy Ltd, covering 2010-11 and the short period in 2011-12 up to the closure of the company in July 2011. This was on the grounds of considerable uncertainty surrounding the accuracy of those statements.

Firebuy Ltd, an NDPB of the Department for Communities and Local Government, closed without having prepared financial statements for the two financial years in question.

The Treasury’s Managing Public Money is clear that, when an NDPB closes, there should be procedures in place to gain independent assurance on key transactions, financial commitments, cash flows and other information needed for the Department (and, in this case, the liquidators) to handle the wind-up effectively. In this instance, Firebuy Ltd did not transfer all of its financial documentation to the Department.

As a result, there were transactions and account balances for which the Comptroller and Auditor General was unable to obtain sufficient documentary evidence. Furthermore, there were no longer any Directors or staff of Firebuy Ltd to provide explanations for transactions, adjustments and events which the Department could not explain.

The main role of Firebuy Ltd was to help deliver procurement efficiencies for fire and rescue authorities in England through nationally negotiated contracts with suppliers. In October 2010, the Government announced the closure of the body. All of its procurement functions were transferred to other organisations.

The Department has already taken steps to ensure that lessons are learned from this company closure – by communicating the problems encountered with Firebuy Ltd to key stakeholders in the Departmental group who are also preparing to face closure issues in relation to other bodies.

Notes for Editors

  1. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  2. The National Audit Office scrutinizes public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 860 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of more than £1 billion in 2011.

PN: 20/12