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The Department for Communities and Local Government has shown commitment to financial leadership and governance and has improved its financial management over the last couple of years. However, there is more to do for the department to embed good financial management throughout the department and to improve the financial and business management skills of its staff.

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The department has increased the number of professionally qualified finance staff, particularly in senior finance roles, and has shown a commitment to improving financial leadership and governance throughout the organisation. Further recruitment and training of staff with financial and business management skills would allow the department to improve further its analysis and interpretation of financial data and its management of complex activities.

The department has improved its business planning and decision-making, but the quality and analysis of the financial information supporting investment decisions still needs improvement and the investment process requires further development to deal better with situations requiring an urgent response.

At present, the department cannot accurately report expenditure against its strategic objectives, but can provide only notional allocations of financial information by objective. As a result, it cannot easily identify or understand the impact of funding decisions on performance and outcomes.

The department has improved its business planning and, for 2009-10, budgets were agreed before the start of the financial year – an improvement on previous years.

"The Department for Communities and Local Government spends some £34 billion a year and so good financial management is very important, not just to accountants but also to taxpayers and public service users.

"The Department rightly takes financial management seriously and is making improvements. However, it has more to do. As a priority, it must identify and understand the gaps in its financial and business management skills and set about filling them."

Amyas Morse, the head of the National Audit Office


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