Sir John Bourn, head of the National Audit Office, today reported to Parliament that he has qualified his opinions on the above accounts because the Fire Service College could not produce reliable costing information that would confirm whether it had set its fees and charges in accordance with the Treasury Minute which defined the College’s financial objectives.
The Treasury Minute requires that the prices charged by the College to UK fire authorities and other Exchequer customers must not exceed the full cost of the courses provided for them. However, the National Audit Office found that:
- the College’s management information system did not provide an integrated link between the costing of courses and the setting of fees and charges;
- course costings for 1996-97 and 1997-98 had been based on costs derived in 1995 but these original figures had not been updated since then;
- the on-cost used to recover indirect costs had increased significantly over the years – from 50 per cent of direct costs in 1993, to 110 per cent in 1995 and to 130 per cent in 1996 and 1997 for fire authority courses – but the College was unable to provide data to support these rates; and
- the College did not separately identify direct, indirect, fixed and variable costs nor did it compare prices charged for courses with actual costs incurred.
The National Audit Office concluded that the College did not have a sufficiently reliable system for calculating the full cost of providing courses to its customers and, given the limited information available to demonstrate whether it had complied with the terms of its Treasury Minute, the Comptroller and Auditor General has qualified his opinion in this respect on both the 1996-97 and 1997-98 accounts.
The Fire Service College has introduced new course prices from April 1999 which aim to reflect more closely the use of training resources and their costs. The overall objective of the College is to move to a position of full cost recovery but future strategy will be influenced by the prior options review which is assessing the College’s role in helping to meet central training requirements in the Fire Service.