Amyas Morse, the Comptroller and Auditor General, has again refused to sign off the financial accounts of the Ministry of Defence.

While the Department has improved its recording of the equipment and supplies it holds in its warehouse and stock systems, the C&AG has not been provided with sufficient evidence to support MOD’s valuation of military equipment in the form of inventory worth £3 billion and capital spares worth £7 billion.

The Department has not yet obtained the necessary approvals for the remuneration package of the Chief of Defence Materiel. Consequently, the C&AG has reported on the absence of this authorisation.

The C&AG has also qualified his audit opinion because the Department has not complied with the accounting requirements, introduced under International Financial Reporting Standards, for determining whether a contract contains a lease. The Department has therefore omitted a material value of assets and liabilities from its Statement of Financial Position for the third year running. The C&AG cannot quantify the impact of this on the accounts with certainty because, as a result of its accounting policies, the Department has not maintained the records, or obtained the information required.