Amyas Morse, Comptroller and Auditor General (C&AG), has qualified his audit opinions on the Client Funds Accounts prepared by the Department for Work and Pensions for the 1993 and 2003 Child Maintenance Schemes on the grounds of material levels of irregular receipts and payments and misstated arrears balances. However he has given a clean audit opinion on the 2012 Child Maintenance Scheme Account after improvements in the accuracy of assessing child maintenance claims.
This is the first year in which the 2012 Scheme Account has received an unmodified opinion from the C&AG. The Department expects accuracy to improve further as it increases the proportion of child maintenance assessment calculations that are automated. However unpaid maintenance on the 2012 Scheme cases has increased by £55.8 million since last year to £113.8 million.
The Department is closing the 1993 and 2003 Child Maintenance Schemes, supporting parents to set up family based maintenance arrangements or apply to the 2012 Scheme. The C&AG has once again qualified his opinions on the 1993 and 2003 scheme Account. He has estimated irregular receipts and payments of £11.3 million, or 2.75% of total receipts. The C&AG also estimates that the arrears balance reported in the Account relating to unpaid maintenance is understated by at least £99.8 million (2.7% of the total arrears balance), largely due to errors in underlying assessment calculations that are compounded when the cases are managed outside of the IT systems. While the Department is trying to recover arrears accumulated under these Schemes, it is not carrying out retrospective corrections. This means it cannot ensure that the £3.7 billion it is trying to recover is an accurate figure. The Department is also unable to write this debt off, which means that unless action is taken, the 1993 and 2003 Scheme Account will report an outstanding arrears balance long after all the cases have closed.
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Child Maintenance Client Funds Accounts 2016-17
Notes for editors
- The Department is closing its 1993 and 2003 ‘Child Support Agency’ child maintenance schemes. The 1993 and 2003 schemes struggled with IT problems leading to poor customer service, backlogs and incomplete information about amounts due. The 2012 Child Maintenance Scheme administered by the Department’s Child Maintenance Service was introduced to resolve these problems and encourage private arrangements. Since November 2013 all new applications have been to the 2012 scheme. The Department began to tell parents in 2014 that their 1993 and 2003 Scheme cases would close and that they would have to apply to the new 2012 scheme, or make their own family-based arrangements. The Department has reported that 771,000 cases had been closed as of June 2017, of a total expected 812,000 cases due to be closed by the end of 2018.
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- The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £734 million in 2016.