National Savings sums don't add up
A shortage of trained accountants has hindered plans by government agency National Savings to improve its financial accounting procedures, the National Audit Office said last week, reports Phillip Inman.
The government watchdog criticised National Savings, which registered #57bn-worth of investments last year, for its failure to produce accurate financial information for its two main products.
The NAO said significant differences existed between the amounts disclosed in the financial accounts and those calculated by adding up customer account balances. In one instance, a suspense account which holds transactions until they have been directed into the account of a particular product showed #37m owed to the agency by investors and a related bank account was #28m overdrawn. But, the NAO said, investors cannot owe money to the agency.
Sir John Bourn, head of the NAO, said: ‘These weaknesses impair the agency’s financial accounting systems which support the production of accounts for Parliament and make it hard to establish the total liability of the Exchequer to National Savings investors.’
He repeated demands that National Savings should upgrade its financial computer systems and increase the number of accountants. Both reports demanded that finance functions should be automated to free up existing staff to review reconciliations and resolve differences which currently exist in the financial reporting systems.
Until 1979, National Savings had just two accountants and no in-house training arrangements. By the end of last year, the agency had 15 accounting staff, but had failed to fulfill demands that ‘the accounting function be accorded greater importance in the agency’. The NAO also claimed: ‘Too much reliance was placed on too few accounting staff to prepare the financial statements.’ National Savings was unavailable for comment.
