Head of the National Audit Office Sir John Bourn has qualified his opinion on the Child Support Agency’s Client Funds account for the eighth year running in the light of continuing high levels of error in maintenance assessments.
Sir John reported to Parliament today that he had taken this action because of the estimated level of error in receipts from non-resident parents and estimated errors in outstanding maintenance balances, arising mainly from errors in the underlying maintenance assessments.
Previous NAO reports on this account have highlighted the legacy of error left by the Agency’s poor performance in making accurate maintenance assessments. Evidence from the NAO’s audit and the Agency’s own internal performance measurement unit indicates that high error rates continued in 2001-2002, although the accuracy of maintenance assessments had improved compared to 2000-2001.
Sir John notes that Child Support Reforms aimed at promoting increased accuracy in maintenance awards, due to be introduced in April 2002, have been delayed following an announcement by the Secretary of State for Work and Pensions in March 2002. This decision was taken because testing on a new computer system had not been completed and reflected the Agency’s successful implementation of a robust risk management process. The Agency will not introduce the new scheme now until the system can be operated to specified standards.
Based on the audit results obtained Sir John estimates that:
- 36 per cent of receipts from non-resident parents and 81 per cent of maintenance assessment debts were incorrect;
- of the £545 million receipts from non-resident parents, there were overpayments of £12 million and underpayments of £10 million; and
- the amount of £611 million shown in the account as due from non-resident parents for maintenance assessments at 31 March 2001, contained overstatement errors of £163 million and understatement errors of £252 million in debts arising from full maintenance assessment; and overstatement errors of £30 million and understatement errors of £6 million in debts arising from interim maintenance assessments.