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DfE under fire for 'error and uncertainty' in accounts

The National Audit Office (NAO) has issued its first “adverse opinion” in a decade on the Department for Education’s accounts, stating there is a significant level of “error and uncertainty” in their financial statements.

The public spending watchdog has warned the government department, stating that it does not think the figures give a “true and fair” reflection of its financial activity.

Since 2012-13, the DfE has brought together the accounts of all academy trusts with its own and that of its executive agencies. As academies have a different reporting period, this has made it difficult to make sense of the figures, the NAO says.

NAO chief Amyas Morse says in his report that he has provided an “adverse opinion”, adding that the level of error he identified was both “material and pervasive”.

Mr Morse said: "I recognise the importance of not placing unnecessary additional burdens on the academy sector. But the inability of the Department for Education to prepare financial statements providing a true and fair view of financial activity by its group of bodies means that it is not meeting the accountability requirements of Parliament.”

The DfE said it was taking the concerns "very seriously" and would be working with the Treasury to rectify the problems.

"We are pleased the NAO has found no material inaccuracies in the financial statements of the department, the Education Funding Agency and the 3,905 academy trusts included in this report," a spokesperson said.

"However, consolidating the accounts of thousands of academies is an enormous task – a complex procedure and the largest of its kind carried out in the UK – and we recognise the issues identified by the NAO with this process."

The last time a major government department was given a similar adverse opinion was in 2004-05 when the Home Office's accounts were disclaimed because they were in such disorder that they could not be audited.

Shadow education secretary Tristram Hunt said the findings in the accounts raised "very serious questions about the ability of ministers to run the department".

"This is a straightforward, open-and-shut-case of incompetence by David Cameron's government. The accounts reflect serious management and leadership failings at the Department for Education that go all the way to the top," Mr Hunt said.

"Ministers should come to the House of Commons to explain why they have made no progress since the last accounts. The findings raise very serious questions about the ability of ministers to run the department."

Related stories:

Government scrutiny of schools is a 'sorry state of affairs' – 30 October 2014

Durand Academy criticised for potential conflicts of interest  13 November 2014

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