Amyas Morse, Comptroller and Auditor General, has once again been unable to give a full sign off to the Client Funds Account of the Child Maintenance and Enforcement Commission.
While the 2010-11 accounts properly present the amounts received and paid, he has qualified his opinions on the regularity of receipts and payments because of the level of error in maintenance assessments. He has also given adverse opinions on the truth and fairness of the outstanding maintenance arrears (reported in note 6 to the account). Today’s report recognises, however, that significant improvements have been made by the Commission to the information available on child maintenance arrears. The accounts have been qualified in terms of regularity because of the errors made in the calculations of maintenance assessments. Some payments have been based on incorrect assessments and some have been paid at the wrong rate. The best estimates for irregular receipts and payments for 2010-11 are £10.2 million overpayments and £13.9 million underpayments.
The C&AG has also given adverse opinions on the truth and fairness of note 6 to the account, the outstanding child maintenance arrears, which the Commission reports to be £3.748 billion at 31 March 2011. These figures do not give a true and fair view because of the level of error in the underlying case data. The best available estimates of the cumulative errors indicate that the reported arrears at 31 March 2011 contained overstatements of £219 million and understatements of £316 million.
Since the Commission took over responsibility for the statutory child maintenance schemes in November 2008, it has made significant improvements to the information available on child maintenance arrears. Errors in the underlying case data, which were previously unknown, have therefore now been made visible. The C&AG is obliged therefore to give an adverse opinion on the reported arrears. The opinions on arrears do not reflect a deterioration in the accuracy of data; rather increased transparency of errors that have accumulated since the inception of the statutory child maintenance schemes.
The Commission estimates that £0.54 billion (14 per cent of the total) of the outstanding balance is likely to be collectable. However, given the level of error in the underlying arrears data, there is significant uncertainty surrounding the accuracy of the estimated collectable amount.