The Comptroller and Auditor General, Sir John Bourn, today reported to Parliament that he has qualified his opinion on the Lord Chancellor’s Department Appropriation Account due to limited evidence available to confirm that £633 million of criminal legal aid payments complied fully with legal aid regulations. He has also reported on control weaknesses in the Lord Chancellor’s Department and the misinterpretation of proper accounting treatment by the Serious Fraud Office which have led these departments to incur expenditure in excess of the amounts granted for 1998-99 and for which further Parliamentary authority is now required.
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In each of the years since 1990-91, the Comptroller and Auditor General has qualified his audit opinion on the Department’s Appropriation Account, and the Committee of Public Accounts has taken evidence from the Department on four separate occasions. The Department has taken seriously the Committee’s concerns and, over time, its initiatives have secured a steady improvement in the amount and quality of documentary evidence obtained to support claims for free legal aid and income and expenditure allowances in other cases.
During 1998-99, the Department’s Internal Assurance Division maintained its continuing review of magistrates’ courts’ compliance with legal aid regulations. This work is directed to improving as well as monitoring performance.
As a result of its audit work at 30 courts, in two rounds of visits, the Internal Assurance Division found:
- for applicants claiming free legal aid, 95 per cent provided good proof of entitlement;
- for applicants not claiming free legal aid, but who might be liable to make a contribution, 93 per cent on one round of visits and 99 per cent on the other had supplied some evidence of their income; and 96 per cent and 98 per cent of applicants provided evidence of expenses allowable against income; and
- there were errors in the determination of contributions in 31 per cent and 32 per cent of cases examined.
To obtain independent evidence and to confirm the validity of the Internal Assurance Division’s results, the National Audit Office conducted a similar examination at 10 locations, and found:
- for applicants claiming free legal aid, 93 per cent (74 per cent in 1997-98) provided adequate evidence of entitlement and, in a further 5 per cent of cases (13 per cent in 1997-98), that evidence was insufficient. However, in 2 per cent of cases (13 per cent in 1997-98), free legal aid had been granted without any evidence of entitlement;
- for applicants not claiming free legal aid, 91 per cent (85 per cent in 1997-98) had supplied some evidence of their income and 86 per cent (69 per cent in 1997-98) had provided evidence of expenses allowable against income; and
- there were errors in the determination of contributions in 32 per cent of the cases examined (38 per cent in 1997-98).
The National Audit Office visits show a lower level of compliance in the amount and quality of documentary evidence provided, compared to the Internal Assurance Division’s findings. Since the National Audit Office visits were carried out for audit rather than management purposes, they were not preceded by the pre-audit visits conducted by the internal auditors in their sample of courts, which should have helped to improve compliance with the regulations in those courts.
In view of the limited evidence available to give reasonable assurance of full compliance with regulations relating to the award of criminal legal aid and determination of contribution orders, the Comptroller and Auditor General has qualified his opinion on this account for a further year.
The Comptroller and Auditor General has also reported to Parliament that he has qualified his opinion on the above account because the Lord Chancellor’s Department has exceeded, by £1.14 million, its limit on running cost expenditure. The excess expenditure arose because rent paid in 1997-98 was not accounted for until 1998-99 and this was not discovered until the end of that year by which time remedial action could not be taken. Also contributing to the excess expenditure, there was an increased cost of capital charge which had resulted from the revaluation of property. The Department has taken action to prevent these control weaknesses recurring and to improve financial information as well as the monitoring of expenditure.
Serious Fraud Office
The Comptroller and Auditor General has reported to Parliament that he has qualified his opinion on the Appropriation Account of the Serious Fraud Office which has overspent by £0.7 million. The Department incurred excess expenditure of £0.1 million but receipts, which may be offset against expenditure, fell short of the amount expected by £0.6 million.
The excess expenditure arose because unexpected costs were awarded against the Department when the court quashed search warrants obtained in connection with a mutual legal assistance case for an overseas government. The deficiency of receipts resulted from the misinterpretation of the proper accounting treatment for VAT on contracted out services. Had the Department recognised the correct accounting treatment before the end of the financial year, it would have taken steps to change its planned expenditure to avoid the excess.
"The Lord Chancellor's Department has clearly made significant progress towards improving the checking of criminal legal aid applications though more remains to be done.I am disappointed, however, to have to report that financial control weaknesses in the Lord Chancellor's Department and the incorrect accounting treatment by the Serious Fraud Office meant that both departments have exceeded the funds granted by Parliament and had to ask for further parliamentary authority to approve their expenditure."
Sir John Bourn
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Publication details
- ISBN: 105566861 [Buy a hard copy of this report]
- HC: 11-VIII 1999-2000
